Schalheim sisters inc. has always paid out all of its earnings as dividends, hence the firm has no retained earnings. this same situation is expected to persist in the future. the company uses the capm to calculate its cost of equity, its target capital structure consists of common stock, preferred stock, and debt. which of the following events would reduce its wacc? a. the market risk premium declines. b.the flotation costs associated with issuing new common stock increase. c.the company’s beta increases. d.expected inflation increases. e.the flotation costs associated with issuing preferred stock increase.

In year 1, the bennetts' 25-year-old daughter, jane, is a full-time student at an out-of-state university but she plans to return home after the school year ends. in previous years, jane has never worked and her parents have always been able to claim her as a dependent. in year 1, a kind neighbor offers to pay for all of jane's educational and living expenses. which of the following statements is most accurate regarding whether jane's parents would be allowed to claim an exemption for jane in year 1 assuming the neighbor pays for all of jane's support? a.no, jane must include her neighbor's gift as income and thus fails the gross income test for a qualifying relative.b.yes, because she is a full-time student and does not provide more than half of her own support, jane is considered her parent's qualifying child.c.no, jane is too old to be considered a qualifying child and fails the support test of a qualifying relative.d.yes, because she is a student, her absence is considered as "temporary." consequently she meets the residence test and is a considered a qualifying child of the bennetts.