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NEW QUESTION: 1
Which of the following statements is most correct?
A. A firm facing a steep demand curve (that is, high flotation costs) for new equity would likely also face, at some point, a steeply upward sloping WACC curve.
B. All of these statements are false.
C. All of these statements are correct.
D. One purpose of calculating the WACC (Weighted Average Cost of Capital) is to have a singular cost of capital measure that can be applied to evaluate all of the firm's projects, including those of greater than and lesser than average risks.
E. A break point is based on the dollar value used of a specific type of capital, and occurs at the point where the cost of that capital type increases. Thus, if a firm has $100,000 in earnings, and stockholders want $50,000 of those earnings paid as dividends, then retained earnings will have two break points.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Because of high flotation costs, dollars raised by selling new stock must work harder than dollars raised by retaining earnings. Steep demand would result in a steeply upward sloping WACC curve. Note, however, that for most firms, new equity issues are rare.

NEW QUESTION: 2
Which of the following items is NOT a benefit of cold sites?
A. Low Cost
B. Quick Recovery
C. A secondary location is available to reconstruct the environment
D. No resource contention with other organisation
Answer: B
Explanation:
A cold site is a permanent location that provide you with your own space that you can move into in case of a disaster or catastrophe. It is one of the cheapest solution available as a rental place but it is also the one that would take the most time to recover. A cold site usually takes one to two weeks for recoverey.
Although major disruptions with long-term effects may be rare, they should be accounted for in the contingency plan. The plan should include a trategy to recover and perform system operations at an alternate facility for an extended period. In general, three types of alternate sites are available: //
Dedicated site owned or operated by the organization. Also called redundant or alternate sites; Reciprocal agreement or memorandum of agreement with an internal or external entity; and Commercially leased facility.
Regardless of the type of alternate site chosen, the facility must be able to support system operations as defined in the contingency plan. The three alternate site types commonly categorized in terms of their operational readiness are cold sites, warm sites, or hot sites. Other variations or combinations of these can be found, but generally all variations retain similar core features found in one of these three site types.
Progressing from basic to advanced, the sites are described below:
Cold Sites are typically facilities with adequate space and infrastructure (electric power, telecommunications connections, and environmental controls) to support information system recovery activities.
/Warm Sites are partially equipped office spaces that contain some or all of the system hardware, software, telecommunications, and power sources.
Hot Sites are facilities appropriately sized to support system requirements and configured with the necessary system hardware, supporting infrastructure, and support personnel.
As discussed above, these three alternate site types are the most common. There are also variations, and hybrid mixtures of features from any one of the three. Each organization should evaluate its core requirements in order to establish the most effective solution.
Two examples of variations to the site types are:
/Mobile Sites are self-contained, transportable shells custom-fitted with specific telecommunications and system equipment necessary to meet system requirements. /Mirrored Sites are fully redundant facilities with automated real-time information mirroring. Mirrored sites are identical to the primary site in all technical respects.
There are obvious cost and ready-time differences among the options. In these examples, the mirrored site is the most expensive choice, but it ensures virtually 100 percent availability. Cold sites are the least expensive to maintain, although they may require substantial time to acquire and install necessary equipment. Partially equipped sites, such as warm sites, fall in the middle of the spectrum. In many cases, mobile sites may be delivered to the desired location within 24 hours, but the time necessary for equipment installation and setup can increase this response time. The selection of fixed-site locations should account for the time and mode of transportation necessary to move personnel and/or equipment there. In addition, the fixed site should be in a geographic area that is unlikely to be negatively affected by the same hazard as the organization's primary site.
The following reference(s) were used for this question: http://csrc.nist.gov/publications/nistpubs/800-34-rev1/sp800-34-rev1_errata-Nov11-2010.pdf

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