Corporate Finance Essentials The CAPM and the Cost of Capital Coursera quiz Answers

The CAPM and the Cost of Capital Quiz 3 answers are given here

1. 

What is Bull’s net income?

$162.5 million

2. 

What is Bear’s net income?

$146.9 million

3. 

What is the tax shield that Bear obtains because of its debt?

$8.4 million

4. 

Assuming that the required return on Bear’s debt is currently equal to its interest rate of 6%, what is this company’s after-tax cost of debt?

3.9%

5. 

Which one of the statements below is true?

The inputs of the CAPM can be estimated in a wide variety of ways.

6. 

Of the five options below, select the one that incorrectly completes the following sentence:“The weighted-average cost of capital …

is always based on weights of 50% debt and 50% equity.”

7. 

Which one of the statements below is false?

The cost of debt is typically higher than the cost of equity.

8. 

Which one of the statements below is true?

The yield to maturity of a coupon bond changes whenever the bond’s price changes.