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Updated
2007-06-17 13:43

## Chapter10

Question | Answer |
---|---|

The weighted average cost of capital, WACC, is _____ - debt, preferred stock, and common equity. Each weighting factor is the proportion of that type of capital in the optimal, or target, capital structure. | the weighted average of the after-tax component costs of capital |

The weighted average cost of capital, WACC, is the weighted average of the after-tax component costs of capital - _____(3 things). Each weighting factor is the proportion of that type of capital in the optimal, or target, capital structure. | debt, preferred stock, and common equity |

The weighted average cost of capital, WACC, is the weighted average of the after-tax component costs of capital - debt, preferred stock, and common equity. Each weighting factor is _____ in the optimal, or target, capital structure. | the proportion of that type of capital |

The weighted average cost of capital, WACC, is the weighted average of the after-tax component costs of capital - debt, preferred stock, and common equity. Each weighting factor is the proportion of that type of capital in _____. | the optimal, or target, capital structure |

The _____, rd(1 - T), is the relevant cost to the firm of new debt financing | after-tax component cost of debt |

The after-tax component cost of debt, _____ (equation), is the relevant cost to the firm of new debt financing | rd(1 - T) |

The after-tax component cost of debt, rd(1 - T), is _____ of new debt financing | the relevant cost to the firm |

The after-tax component cost of debt, rd(1 - T), is the relevant cost to the firm of _____ | new debt financing |

## Chapter 5

Question | Answer |
---|---|

The technician is interested only in _____ | the record of a stock's price. p109 |

The fundamentalist's primary concern is with _____ | what a stock is really worth. p110 |

The fundamentalist's most improtant job is to estimate the firm's _____ | future stream of earnings and dividends. p110 |

Fundamentalist stock valuation determinant #1, value high if | high growth rate, long duration (GDRI) |

Fundamentalist stock valuation determinant #2, value high if | high dividend payout (GDRI) |

Fundamentalist stock valuation determinant #3, value high if | low risk (GDRI) |

Fundamentalist stock valuation determinant #4, value high if | low interest rates (GDRI) |

The mathematical precision of fundamental-value formulas is based on what treacherous ground? | forecasting the future |

Fundamental analysis might fail to work because _____ may be incorrect | information and analysis |

Fundamental analysis might fail to work because information and analysis _____ | may be incorrect |

Fundamental analysis might fail to work because the analyst's _____ may be faulty | estimate of value |

Fundamental analysis might fail to work because the analyst's estimate of value _____ | may be faulty |

Fundamental analysis might fail to work because the market may _____ | not correct its mistake (of undervaluation) |

## Chapter 1

Question | Answer |
---|---|

A "castle in the air" is a _____ which does not reach fruition due to practical considerations | creative idea |

A "castle in the air" is a creative idea which _____ due to practical considerations | does not reach fruition |

A "castle in the air" is a creative idea which does not reach fruition due to _____ | practical considerations |

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