CAS-004 Practice Questions

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NEW QUESTION: 1
Gulf Electric Company (GEC) uses only debt and equity in its capital structure. It can borrow unlimited amounts at an interest rate of 10 percent so long as it finances at its target capital structure, which calls for
55 percent debt and 45 percent common equity. Its last dividend was $2.20; its expected constant growth rate is 6 percent; its stock sells on the NYSE at a price of $35; and new stock would net the company $30 per share after flotation costs. GEC's tax rate is 40 percent, and it expects to have $100 million of retained earnings this year. GEC has two projects available: Project A has a cost of $200 million and a rate of return of 13 percent, while Project B has a cost of $125 million and a rate of return of 10 percent. All of the company's potential projects are equally risky. Assume now that GEC needs to raise $300 million in new capital. What is GEC's marginal cost of capital for evaluating the $300 million in capital projects and any others that might arise during the year?
A. 9.00%
B. 9.50%
C. 12.66%
D. 6.00%
E. 13.77%
Answer: B
Explanation:
Explanation/Reference:
Explanation:
k(d) (interest rate on the firm's new debt) = 10%;
k(d)(1 - T) (after-tax component cost of debt) = 10%(0.6) = 6%.
D/A = 55%
D(0) = $2.20
g = 6%
P(0) = $35
P(N) = $35
T (The firm's marginal tax rate) = 40%
Retained earnings = $100M; BP(RE) = $100M/ .45 = $222.22M
k(s) (component cost of retained earnings) = $2.33/$35 + 6% = 12.66%
k(e) (component cost of external equity) = $2.33/$30 + 6% = 13.77%.
WACC (Weighted Average Cost of Capital) (1) = 0.55(6%) + 0.45(12.66%) = 9.0% WACC(2) = 0.55(6%) +
0.45(13.77%) = 9.5%

NEW QUESTION: 2
Drag and Drop Question
You have two Azure virtual machines named VM1 and VM2. VM1 has a single data disk named Disk1.
You need to attach Disk1 to VM2. The solution must minimize downtime for both virtual machines.
Which four actions should you perform in sequence? To answer, move the appropriate actions from the list of actions to the answer area and arrange them in the correct order.

Answer:
Explanation:

Explanation:
Step 1: Stop VM1.
Step 2: Detach Disk1 from VM1.
Step 3: Start VM1.
Detach a data disk using the portal
In the left menu, select Virtual Machines.
Select the virtual machine that has the data disk you want to detach and click Stop to deallocate the VM.
In the virtual machine pane, select Disks.
At the top of the Disks pane, select Edit.
In the Disks pane, to the far right of the data disk that you would like to detach, click the Detach button image detach button.
After the disk has been removed, click Save on the top of the pane. In the virtual machine pane, click Overview and then click the Start button at the top of the pane to restart the VM.
The disk stays in storage but is no longer attached to a virtual machine.
Step 4: Attach Disk1 to VM2
Attach an existing disk
Follow these steps to reattach an existing available data disk to a running VM. Select a running VM for which you want to reattach a data disk.
From the menu on the left, select Disks.
Select Attach existing to attach an available data disk to the VM.
From the Attach existing disk pane, select OK.
References:
https://docs.microsoft.com/en-us/azure/virtual-machines/windows/detach-disk
https://docs.microsoft.com/en-us/azure/lab-services/devtest-lab-attach-detach-data-disk

NEW QUESTION: 3
What are two optional features on both SurePOS 500 Series models?
A. biometric fingerprint reader
B. stereo speakers
C. modular flash drive
D. tool-less serviceability
Answer: A,C
Explanation:
B:64 GB SSD (Replaces HDD)available for model 566 and model 570. D:Biometric fingerprint reader (Toshiba offering provided with HD coating)

NEW QUESTION: 4
A company is concerned about employees connecting mobile devices to the network and introducing viruses and other malware. Which HP Intelligent Management Center (IMC) module would you suggest to protect the company network?
A. Network Access Control (NAC)
B. Desktop Asset Manager (DAM)
C. Endpoint Admission Defense (EAD)
D. Wireless Services Manager (WSM)
Answer: C
Explanation:
Reference:http://h18000.www1.hp.com/products/quickspecs/13836_div/13836_div.PDF