A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith, Inc

1.

A group of individuals got together and purchased all of the outstanding shares of common stock of DL Smith, Inc. What is the return that these individuals require on this investment called?    A.  dividend yield B.  cost of equity C.  capital gains yield D.  cost of capital E.  income return Refer to section 14.2

2.	Textile Mills borrows money at a rate of 13.5 percent. This interest rate is referred to as the:    A.  compound rate. B.  current yield. C.  cost of debt. D.  capital gains yield. E.  cost of capital. Refer to section 14.3

3.

The average of a firm's cost of equity and aftertax cost of debt that is weighted based on the firm's capital structure is called the:    A.  reward to risk ratio. B.  weighted capital gains rate. C.  structured cost of capital. D.  subjective cost of capital. E.  weighted average cost of capital. Refer to section 14.4

4.

When a manager develops a cost of capital for a specific project based on the cost of capital for another firm which has a similar line of business as the project, the manager is utilizing the _____ approach.    A.  subjective risk B.  pure play C.  divisional cost of capital D.  capital adjustment E.  security market line Refer to section 14.5