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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. No, because the weighted average cost of capital will increase.
C. Yes, because the weighted average cost of capital will decrease.
D. Yes, because the cost of equity capital will decrease.
Answer: C
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
To qualify as an Identity Awareness enabled rule, which column MAY include an Access
Role?
A. Track
B. Source
C. Action
D. User
Answer: B

NEW QUESTION: 3
Which option describes the reason that transcoding resources are added in Cisco Unified
Communications Manager?
A. to enable transcoding resources in Cisco IP Phones
B. to provide transcoding resources in Cisco IOS gateways to Cisco Unified
Communications Manager
C. to enable transcoding resources in a Cisco Unified Communications Manager server
D. to enable Cisco Unified Communications Manager to select the optimal single codec for end-to-end calls
Answer: B

NEW QUESTION: 4
A contractor is setting up and configuring conference rooms for a convention. The contractor sets up each room in the conference center to allow wired Internet access going to individual tables. The contractor measured the distance between the hotel's patch panel to the jack, and the distance is within Cat 5e specifications. The contractor is concerned that the room will be out of speculation if cables are run in each room from the wall jacks. Witch of the following actions should the contractor take to ensure the cable runs meet speculations and the network functions property?
A. Place a switch on each table to ensure strong connectivity.
B. Place a switch at the hotel's patch panel for connecting each room's cables.
C. Place repeaters between the patch panel and the rooms.
D. Place a switch at the wall jack and run the cables in the room from there.
Answer: B