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Which of the following statements regarding the weighted average cost of capital is accurate?

A stock has a beta of 1.24 and an expected return of 11.42 percent. If the risk-free rate is 3.9 percent, what is the stock’s reward-to-risk ratio?

Western Electric has 28,000 shares of common stock outstanding at a price per share of $71 and a rate of return of 13.40 percent. The firm has 6,900 shares of 7.00 percent preferred stock outstanding at a price of $91.00 per share. The preferred stock has a par value of $100. The outstanding debt has a total face value of $380,000 and currently sells for 107 percent of face. The yield to maturity on the debt is 7.84 percent. What is the firm’s weighted average cost of capital if the tax rate is 21 percent?

Assume a firm utilizes the security market line approach to determine the cost of equity. If the firm currently pays an annual dividend of $3.36 per share and has a beta of 1.38, all else constant, which of the following actions will increase the firm’s cost of equity?

Ellis-Clay is replacing a machine that has worn out. The replacement machine will not impact sales or operating costs and will not have any salvage value at the end of its five-year life. The firm has a tax rate of 22 percent, uses straight-line depreciation over an asset’s life, ignores bonus depreciation options, and has a positive net income. Given this, which one of the following statements is correct?

Which one of the following is the relationship between the percentage change in operating cash flow and the percentage change in quantity sold?

Catering by Thomas has average daily credit sales of $2,560, an inventory period of 12 days, and a collection period of 23 days. What is the average accounts receivable balance?

Based on the period 1926-2019, the actual real return on large-company stocks has been around:

Assume Barnes’ Boots has a debt-equity ratio of .52. The firm uses the capital asset pricing model to determine its cost of equity. Accordingly, the firm’s estimated cost of equity:

Which of the following is the main advantage of using the dividend growth model to estimate a firm’s cost of equity?