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NEW QUESTION: 1
Which three of these file types work well with HTTP compression?
A. CD quality songs
B. Text files
C. Digital photos
D. MP4 videos
E. Microsoft Word documents
F. Static HTML Web pages
Answer: B,E,F
NEW QUESTION: 2
A. Option C
B. Option A
C. Option E
D. Option D
E. Option B
Answer: B,C,E
Explanation:
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C. A cloud-based IT resource resides inside a cloud environment.
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Answer: B,C
NEW QUESTION: 4
Given the following choices, what is the optimal capital structure for Chip Co.? (Assume that the company's growth rate is 2 percent.) Debt Ratio
Dividends
Per Share ($)
Cost of Equity
0%5.5011.5%
256.0012.0
406.5013.0
507.0014.0
757.5015.0
A. 40% debt; 60% equity
B. 0% debt; 100% equity
C. 50% debt; 50% equity
D. 75% debt; 25% equity
E. 25% debt; 75% equity
Answer: E
Explanation:
Explanation/Reference:
Explanation:
First, calculate the stock price for each debt level using the dividend growth model, Po = D1/(ks - g).
Debt Div/share ksPo
0%$5.5011.5% $5.50/(0.115 - 0.02) = $57.89.
25%6.0012%$6.00/(0.12 - 0.02) = $60.00.
40%6.5013%$6.50/(0.13 - 0.02) = $59.09.
50%7.0014%$7.00/(0.14 - 0.02) = $58.33.
75%7.5015%$7.50/(0.15 - 0.02) = $57.69.
Clearly, $60.00 is the highest price, so 25% debt and 75% equity is the optimal capital structure.
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