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NEW QUESTION: 1
Datacomp Industries, which has no current debt, has a beta of .95 for its common stock. Management is
considering a change in the capital structure to 30% debt and 70% equity. This change would increase
the beta on the stock to 1.05, and the after-tax cost of debt will be 7.5%. The expected return on equity is
1 6%, and the risk-free rate is 6%. Should Datacomp's management proceed with the capital structure
change?
A. No, because the cost of equity capital will increase.
B. Yes, because the weighted average cost of capital will decrease.
C. Yes, because the cost of equity capital will decrease.
D. No, because the weighted average cost of capital will increase.
Answer: B
Explanation:
Choice "c" is correct. First, compute Datacomp's current weighted average cost of capital by using the
capital asset pricing model (CAPM):

Because there is no debt, the WACC is equal to the CAPM formula for equity or 15.5%. When debt is
introduced, the WACC is calculated by first using the CAPM to determine the required return on equity:

Assuming an after tax cost of debt is equal to 7.5%, the WACC becomes:
(.165 * (.70)) + (.075 * (.3)) = 13.8%
Therefore, Datacomp should change its capital structure because its WACC will decrease (Choice "c").
Choices "a", "b", and "d" are incorrect, per above.

NEW QUESTION: 2
The description of T28181 specification, which is wrong?
A. T28181 specification applies to the design of security and video surveillance networking system
B. T28181 specification applies to system detection of security and video surveillance networked systems
C. T28181 specification does not necessarily apply to the development and production of related video surveillance equipment.
D. T28181 specification applies to project acceptance of security and video surveillance networked systems
Answer: C

NEW QUESTION: 3
Which of the following needs to be considered when determining the amount and size of the hosts required for a virtual design?
A. Future growth
B. Aggregate CPU and memory requirements
C. Number of vCPUs to be hosted per box
D. All of the above
Answer: D
Explanation:
When attempting to determine the host requirements of a virtual design, you need to
determine aggregate CPU and memory requirements, number of virtual CPUs,
number of cores available, maximum utilization, socket and core availability, and
future growth.