Question: 1 The basic sources of capital for a firm include all of the following EXCEPT A Long-term debt B Preferred stock C Current liabilities D

1 The basic sources of capital for a firm include all of the following EXCEPT A Long-term debt B Preferred stock C Current liabilities D Common stock Action Company has a bond paying 8% interest.

If Action pays taxes at a 20% rate the after tax cost of debt would be

A 8% B 20% C 6.40% D 1.60%

14 An asset cost $10,000 and can be sold for $6,000. The book value of the asset is $4,000 and the tax rate is 35%. The net proceeds on the sale of the asset would be:

A $4,000 B $5,300 C $6,000 D $10,000

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