The term risk$-$averse means that

A$)$ most investors and businessmen seek risk.

B$)$ an individual will seek to avoid risk or be compensated with a higher return.

C$)$ only investment proposals with no risk should be accepted.

D$)$ an individual refuses to take risks.

Which of the following is an asset that is usually valued using time value of money?

A$)$ Accounts receivable

B$)$ Inventory

C$)$ Investment

D$)$ Plant property and equipment

Markets, in general, are considered efficient when

A$)$ prices adjust rapidly to new information

B$)$ all of these are true.

C$)$ the market can absorb large dollar amounts of securities without destabilizing the prices.

D$)$ there is a continuous market, in which each successive trade is made at a price close to the previous price.

The coupon rate on a debt issue is $6\%.$ If the yield to maturity on the debt is $9\%,$ what is the after$-$tax cost of debt in the weighted average cost of capital if the firm's tax rate is $21\%?$

A$)7\mathrm{.}92\%$

B$)3\mathrm{.}96\%$

C$)7\mathrm{.}11\%$

D$)4\mathrm{.}08\%$

If a company's stock price $P_0$ goes up$,$ and nothing else changes, $Ke($the required rate of return$)$ should

A$)$ remain unchanged.

B$)$ go up$.$

C$)$ More information is needed for an answer.

D$)$ go down.

The higher the interest rate used in determining the future value of a $$1$ annuity,

A$)$ None of these options.

B$)$ the smaller the future value at the end of the period.

C$)$ the greater the future value at the end of a period.

D$)$ the greater the present value at the beginning of a period.