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NEW QUESTION: 1
DQZ Telecom is considering a project for the coming year, which will cost $50 million. DQZ plans to use
the following combination of debt and equity to finance the investment.
. Issue $15 million of 20-year bonds at a price of 101, with a coupon rate of 8 percent, and flotation costs
of 2 percent of par.
. Use $35 million of funds generated from earnings.
The equity market is expected to earn 12 percent. U.S. treasury bonds are currently yielding 5 percent.
The beta coefficient for DQZ is estimated to be .60. DQZ is subject to an effective corporate income tax
rate of 40 percent.
The Capital Asset Pricing Model (CAPM) computes the expected return on a security by adding the
riskfree rate of return to the incremental yield of the expected market return, which is adjusted by the
company's beta. Compute DQZ's expected rate of return.
A. 9.20 percent.
B. 10.00 percent.
C. 7.20 percent.
D. 12.20 percent.
Answer: A
Explanation:
Choice "a" is correct. 9.20 percent expected rate of return. Choices "b", "c", and "d" are incorrect, per the
above calculation.
NEW QUESTION: 2
Refer to the exhibit.
The show ip ospf interface command has been executed on R1 How is OSPF configured?
A. A point-to-point network type is configured
B. The interface is not participating in OSPF
C. The default Hello and Dead timers are in use
D. There are six OSPF neighbors on this interface
Answer: C
Explanation:
https://www.cisco.com/c/en/us/support/docs/ip/open-shortest-path-first-ospf/13689-17.html
NEW QUESTION: 3
What does the Business Architecture Maturity Model assess?
A. Integration with related disciplines
B. Specific business capabilities
C. Business architecture tool abilities
D. Business performance
Answer: A
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