Capital Structure and Finance Costs Quiz
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Questions and Answers

Which source of finance has the highest percentage in the company's capital structure?

  • Debt capital
  • Preferred stock capital
  • Common equity capital (correct)

    • What is the interest rate on the company's debt before tax?

  • 14%
  • 12%
  • 10% (correct)

    • What is the maximum capital budget of the company?

  • $8,000
  • $800,000
  • $8,000,000 (correct)

    • What is the cost of preferred stocks?

    <p>12%</p> Signup and view all the answers

    What is the purpose of a capital budget?

    <p>To analyze projects and decide which ones to accept</p> Signup and view all the answers

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