Sally Peterson, who works as an entry-level editor, wants to go for dental reconstruction surgery and sent a query to her HR department asking for a list of preferred hospitals
The HR looked through her healthcare plan, which provides only a minimum coverage for routine drugs and vision care. Consequently, the HR manager informed her that if she wishes to carry on with the dental procedure, she will have to pay for it on her own. Which of the following benefits plans should she choose to meet her needs?
A) a basic modular plan
B) a standardized benefits package
C) a core-plus plan
D) a fringe benefits plan
E) a 401k plan
C
Explanation: C) The three most popular types of benefits plans are modular plans, core-plus options, and flexible spending accounts. Core-plus plans consist of a core of essential benefits and a menu-like selection of others from which employees can select. Typically, each employee is given benefit credits which allow the purchase of additional benefits that uniquely meet his or her needs.
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Johnson's Diner has an adjusted WACC of 10.08%. The company has a capital structure consisting of 70% equity and 30% debt, a cost of equity of 12.00%, a before-tax cost of debt of 8.00%, and a tax rate of 30%
Johnson is considering expanding by building a new diner in a distant city and considers the project to be riskier than his current operation. He estimates his existing beta to be 1.0, the required return on the market portfolio to be 12.00%, the risk-free rate to be 3.00%, and the beta for the new project to be 1.40. Given this information, and assuming the cost of debt will not change if Johnson undertakes the new project, what adjusted WACC should he use in his decision-making? A) 10.08% B) 12.60% C) 13.32% D) 14.16%
If a current mortgage payment of $792 per month can be reduced to $578 per month by refinancing, how many months would you need to remain in the house to recoup refinancing charges of $3,784? (Round up to the nearest month.)
A) Five months B) Seven months C) Eighteen months D) The maturity of the loan