Capital Risk Adjustment Multiple Choice Questions with Answers – PDF Download

MCQ 1: A risk associated with the project and the way considered by well diversified stockholder is classified as:

1. expected risk
2. beta risk
3. industry risk
4. returning risk

MCQ 2: If the future return on common stock is 14% and the rate on T-bonds is 5% then the current market risk premium will be:

1. 0.19
2. 0.09
3. 9
4. 19

MCQ 3: The method in which company finds other companies considered in same line of business to evaluate divisions is classified as:

1. pure play method
2. same play method
3. division line method
4. single product method

MCQ 4: If the future return on common stock is 19% and the rate on T-bonds is 11% then the current market risk premium will be:

1. 30
2. 0.3
3. 0.08
4. 8

MCQ 5: In weighted average cost of capital, the cost of capital which is risk adjusted and developed for each category of:

1. long-term projects
2. industry [industrial] projects
3. divisional projects
4. short-term projects