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NEW QUESTION: 1
Yummy Doughnuts (YD) sells a variety of doughnuts and other related items through both company-owned locations and franchise locations. YD has experienced significant growth over the past five years.
However, barriers to entry are low and competition is increasing.
Linda Haas, CFA, follows YD for Gibraltar Capital. Gibraltar Capital prides itself on its thorough fundamental analysis of investment opportunities. The company uses a bottom-up approach to the investment process. Haas's security selection process utilizes residual income models to determine a stock's intrinsic value. Haas obtains YD's 2008 financial statements shown in Exhibit 1. In addition, Haas provides supporting information about YD's financials and other related material found in Exhibit 2.

Haas makes the following statements during her YD presentation to the investment committee.
Statement 1: Based on ROE mean reversion, YD's continuing residual income is assumed to decline to zero over time.
Statement 2: The residual income model states that if YD's ROE equals its equity cost of capital, then YD's intrinsic value will equal its book value per share.
Based on Exhibits 1 and 2, YD's weighted average cost of capital (WACC) is closest to:
A. 11%.
B. 12%.
C. 13%.
Answer: C
Explanation:
Explanation/Reference:
Explanation:

Note: Capitalizing R&D expense will increase YDs book value. However, the market value used in calculating YD s WACC is not impacted.
(Study Sessions 7 and 10, LOS 26.a and 35.h)

NEW QUESTION: 2
CORRECT TEXT
Which option, when passed to the gpg command, will enter an interactive menu enabling the user to perform key management related tasks? (Provide only the option)
Answer:
Explanation:
edit -key, --edit-key

NEW QUESTION: 3
The VEditor is a formatter that shows variables entered in the catalog item form.
A. True
B. False
Answer: A

NEW QUESTION: 4
As shown in the figure below, an enterprise wants to implement secure access between the headquarters and branches through MPLS VPN. VPN traffic of branches must be forwarded through the headquarters for traffic monitoring. Which of the following statements regarding this solution is false?

A. When the Hub-CE and Hub-PE use EBGP to transmit routing Information, the Hub-PE must be able to accept routes with the AS number repeated once so that routes advertised by the Hub-CE can be received.
B. BGP can be used to exchange VPN routing information between CEs and PEs.
C. The MP-IBGP peer relationship can be established between Spoke-PEs to exchange VPN routing information
D. OSPF can be used to exchange routing information between Hub CEs and Hub-PEs as well as between Spoke-PEs and Spoke-CEs.
Answer: A