Which of the following statements is correct? a. the wacc is calculated using a before-tax cost for debt that is equal to the interest rate that must be paid on new debt, along with the after-tax costs for common stock and for preferred stock if it is used. b. an increase in the risk-free rate is likely to reduce the marginal costs of both debt and equity. c. the relevant wacc can change depending on the amount of funds a firm raises during a given year. moreover, the wacc at each level of funds raised is a weighted average of the marginal costs of each capital component, with the weights based on the firm's target capital structure. d. beta measures market risk, which is generally the most relevant risk measure for a publicly-owned firm that seeks to maximize its intrinsic value. however, this is not true unless all of the firm's stockholders are well diversified. e. the bond-yield-plus-risk-premium approach to estimating the cost of common equity involves adding a risk premium to the interest rate on the company's own long-term bonds. the size of the risk premium for bonds with different ratings is published daily in the wall street journal.

At a young age, ebony's coaches were confident she had the potential to be a world-class swimmer with a future coaching career. after four years on an athletic scholarship and olympic experience under her belt, she chose a different path. with her savings and personal connections, she rented a corner building in a bustling san francisco neighborhood and pursued her dream: a surf shop business. ebony's dream was rooted in which basic right of free-market capitalism?

On january 1, 2017, fisher corporation purchased 40 percent (90,000 shares) of the common stock of bowden, inc. for $980,000 in cash and began to use the equity method for the investment. the price paid represented a $48,000 payment in excess of the book value of fisher's share of bowden's underlying net assets. fisher was willing to make this extra payment because of a recently developed patent held by bowden with a 15-year remaining life. all other assets were considered appropriately valued on bowden's books. bowden declares and pays a $90,000 cash dividend to its stockholders each year on september 15. bowden reported net income of $400,000 in 2017 and $348,000 in 2018. each income figure was earned evenly throughout its respective year. on july 1, 2018, fisher sold 10 percent (22,500 shares) of bowden's outstanding shares for $338,000 in cash. although it sold this interest, fisher maintained the ability to significantly influence bowden's decision-making process. prepare the journal entries for fisher for the years of 2017 and 2018. (if no entry is required for a transaction/event, select "no journal entry required" in the first account field. do not round intermediate calculations. round your final answers to the nearest whole dollar.)

Complete the sentences. upper a decrease in current income taxes the supply of loanable funds today because it a. decreases; increases disposable income, which decreases saving b. has no effect on; doesn't change expected future disposable income c. decreases; decreases expected future disposable income d. increases; increases disposable income, which encourages greater saving upper a decrease in expected future income a. increases the supply of loanable funds today because households with smaller expected future income will save more today b. has no effect on the supply of loanable funds c. decreases the supply of loanable funds because it decreases wealth d. decreases the supply of loanable funds today because households with smaller expected future income will save less today