CISSP Practice Questions

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NEW QUESTION: 1
Rollins Corporation is constructing its MCC schedule. Its target capital structure is 20 percent debt, 20 percent preferred stock, and 60 percent common equity. Its bonds have a 12 percent coupon, paid semiannually, a current maturity of 20 years, and sell for $1,000. The firm could sell, at par, $100 preferred stock, which pays a 12 percent annual dividend, but flotation costs of 5 percent would be incurred. Rollins' beta is 1.2, the risk-free rate is 10 percent, and the market risk premium is 5 percent. Rollins is a constant growth firm, which just paid a dividend of $2.00, sells for $27.00 per share, and has a growth rate of 8 percent. The firm's policy is to use a risk premium of 4 percentage points when using the bond-yield-plus- risk- premium method to find k(s). The firm's net income is expected to be $1 million, and its dividend payout ratio is 40 percent. Flotation costs on new common stock total 10 percent, and the firm's marginal tax rate is 40 percent. What is Rollins' WACC once it starts using new common stock financing?
A. 14.1%
B. 16.0%
C. 13.6%
D. 16.9%
E. 16.6%
Answer: A
Explanation:
Explanation/Reference:
Explanation:
k(e) = $2.16/ $27.00(1-.10) + 0.08 = 0.08889 + 0.08 = 0.169 = 16.9%.
WACC = 0.2(12.0%)(0.6) + 0.2(12.6%) + 0.6(16.9%) = 14.1%.

NEW QUESTION: 2
Given the code fragment?

Which two fragments, when inserted independently at line6, enable the code to print true?
A. Boolean b = nums. stream ()
.allMatch -> u - 20);
B. Boolean b = nums. stream ()
.map(n-> n20)
.Nonematch( n -> n == 20) ;
C. Boolean b = nums. stream ()
.filter(n-> n -20)
.allMatch -> u - 20);
D. Boolean b = nums. stream ()
.Nonematch( n -> n == 20) ;
Answer: B,C

NEW QUESTION: 3
Which of the following regarding MPLS encapsulation for VPRN services is TRUE?
A. The customer's Layer 2 header is removed at the iLER.
B. The customer's Layer 3 header is removed at the iLER.
C. The customer's Layer 2 header is removed at the eLER.
D. The customer's Layer 3 header is removed at the eLER.
Answer: B
Explanation:
Section: Volume D