Finance Final

Of the options listed below , which is the best example of systematic risk ?

A city imposes an additional one percent sales tax on all products .

Which of the following yields on a stock can be negative ?

Capital gains yield and total return

Assume all stock prices reflect all relevent information on those stocks at all times Which one of the following terms best defines the stock market under these conditions ?

Efficient Market

Which of the following statements regarding the aftertax cost of debt is accurate ?

It is highly dependent upon a company's tax rate .

Which of the following statements is a correct reflection of the US stock market for the period 1926 until today ?

Large cap stocks outperformed corporate bonds in an average year .

Which of the following statements best describes the principle of diversification ?

Spreading an investment across many diverse assets will eliminate some of the total risk .

The weighted average cost of capital for a firm can depend on all of the following except :

Standard deviation of the firm's common stock

Which one of the following is a risk that is inherent in all stock portfolios ?

Systematic risk

The capital structure of Pentke products is 58% common stock 2% preferred stock in 40% deb the firm maintains the dividend payout ratio of 24% has a beta of 1.08 and has an income tax rate of 21% give me this information which one of the following statements is correct

The cost of equity is unaffected by change in the companies tax rate

A news flash about a single company just appeared that caused the company's stock to drop in value by 20 % in one day What type of risk does this news flash best represent

Unsystematic

Standard deviation is a measure of which one of the following ?

Volatility

Wright Market Research is able to borrow money at a rate of 6.8 percent per year . This interest rate is called the :

cost of debt .