Question Completion Status QUESTION 1 Assume that you have to choose between a perpetuity paying you $100 at the end of each year, starting from next yeart-1and a perpetuity paying you an initial amount of 5100 after seven years (7) but with subsequent cash flows growing at an annual rate of g Assuming the discounting rate is 6 per annum, what value of grounded to four decimals, and expressed in percent) would make the two perpetuities equally valuable? A 1.24794 B. 1.770 C 2.001 D. 1.115 QUESTION 2 Goremann Corp (GC) has a total market value of $524 million. The market value of equity is $300 million and the company carries debt valued at 5224 million. The before-tax cost of debt is 9 percent and the cost of equity is estimated at 14 percent. The statutory company tax rate is 35 percent. What is the weighted average cost of capital for the company closest to? A 18:37 OB 10.52 C8.05 QUESTION 3 Which of the following is not one of the four characteristics of IPOs that pure financial economists! A The costs of the IPO are very high and it is unclear why firms willingly incur such high costs. On average IPOs pear to be underpriced The number of issues is highly D. The long run performance of a newly public company three to five years from the date of issue is superior to the overall markeretur