After-tax kD=kD*(1-T)

After-tax kD=0.05*(1-0.20)= 0.05 * 0.80= 0.04

Abandonment options are options to withdraw resources from a project that fails to live up to short-run expectations. These withdrawals might be the entire commitment to a project. With an abandonment option, company obtains an opportunity to withdraw part or all of its commitment to a project. The correct answer is D.

"Short-term debt" and "Internal Cash Flow (Retained earnings + Depreciation)" are among the sources of cash flow.

Capital expenditure refers to the outlay of funds by the firm that is expected to produce benefits over a period of time longer than one year. The correct answer is B.

"Irredeemable" is among the disadvantages of common stock.

Real options refer to the options of managers about capital investment projects which can be priced by using stock option-pricing methodologies.

NPV (Net Present Value) technique finds the sum of present value of all cash inflows and cash outflows of a project over its life. The correct answer is C.

In bond issues, if the interest rate is floating and not fixed, then it is called as an indexed bond. The index can be any economic indicator but mostly it is a price index, such as the inflation rate, the oil price or the gold price index. The correct answer is D.

Bankruptcy risk refers to the likelihood that a company will be unable to meet its debt obligations.

Syndication loans are credits granted by a group of banks to a borrower. In a syndication loan, two or more banks agree jointly to make a loan to a borrower. Every syndicate member has a separate claim on the debtor, although there is a single loan agreement contract. Therefore, the correct option is B.

Profitability index technique tells the ratio of the present value of a project’s cash inflows to the present value of all cash outflows or initial cash outflow.

"Net working capital + other uses" are among the uses of cash flow.

Competitive advantage refers to a firm’s attribute that may allow the firm to generate economic profits.

k = 0.0675 + 0.0480

= 0.1155

% 11.55

deneme

deneme

Depreciation funds are the major part of internal sources of finance, which is used to meet the working capital requirements of the business concern. Depreciation means a decrease in the value of an asset due to wear and tear, lapse of time, obsolescence, exhaustion and accident. Generally, depreciation is changed against fixed assets of the company at a fixed rate for every year. The correct answer is A.