CPA BEC CLOSING DOCUMENTATION
ASSESSMENT 2026 RECENTLY ISSUED
ITEMS AND OUTCOMES FOR IMMEDIATE
GAIN
Weighted Average Cost of Capital. Ans: (Cost of Equity x % Equity in
Cap Structure) + (Weighted Average Cost of Debt x % of Debt in Cap
Structure)
⩥ Weighted Average Cost of Debt. Ans: Effective Annual Interest
Payments / Debt Outstanding
⩥ After Tax Cost of Debt. Ans: Pretax Cost of Debt x (1 - Tax Rate)
⩥ Cost of Preferred Stock. Ans: Preferred Stock Dividends / Net
Proceeds of Preferred Stock
⩥ CAPM (Cost of Retained Earnings). Ans: Risk-Free Rate + (Beta
Coefficient (Market Return - Risk-Free Rate))
⩥ DCF. Ans: Expected Dividend at the end of One Year / Current
Market Value of the Outstanding Common Stock
⩥ BYRP (Cost of Retained Earnings). Ans: Pretax Cost of LT-Debt +
Market Risk Premium
, ⩥ Growth Rate. Ans: Retention Ratio x Return on Investment
⩥ Return on Investment. Ans: Net Income / AVG Invested Capital
⩥ Return on Assets. Ans: Net Income / Assets
⩥ Return on Equity (ROE). Ans: Net Income / Shareholders Equity
⩥ Total Debt to Capital Ratio. Ans: Total Debt / Total Capital
(liabilities + equity)
⩥ Debt to Equity Ratio. Ans: Total Debt / Total Equity
⩥ Times Interest Earned Ratio. Ans: EBIT / Interest Expense
⩥ Current Ratio. Ans: Current Assets / Current Liabilities
⩥ Quick Ratio. Ans: Cash + Marketable Securities + Receivables /
Current Liabilities
⩥ Cash Ratio. Ans: Cash + Cash Equivalents / Current Liabilities
ASSESSMENT 2026 RECENTLY ISSUED
ITEMS AND OUTCOMES FOR IMMEDIATE
GAIN
Weighted Average Cost of Capital. Ans: (Cost of Equity x % Equity in
Cap Structure) + (Weighted Average Cost of Debt x % of Debt in Cap
Structure)
⩥ Weighted Average Cost of Debt. Ans: Effective Annual Interest
Payments / Debt Outstanding
⩥ After Tax Cost of Debt. Ans: Pretax Cost of Debt x (1 - Tax Rate)
⩥ Cost of Preferred Stock. Ans: Preferred Stock Dividends / Net
Proceeds of Preferred Stock
⩥ CAPM (Cost of Retained Earnings). Ans: Risk-Free Rate + (Beta
Coefficient (Market Return - Risk-Free Rate))
⩥ DCF. Ans: Expected Dividend at the end of One Year / Current
Market Value of the Outstanding Common Stock
⩥ BYRP (Cost of Retained Earnings). Ans: Pretax Cost of LT-Debt +
Market Risk Premium
, ⩥ Growth Rate. Ans: Retention Ratio x Return on Investment
⩥ Return on Investment. Ans: Net Income / AVG Invested Capital
⩥ Return on Assets. Ans: Net Income / Assets
⩥ Return on Equity (ROE). Ans: Net Income / Shareholders Equity
⩥ Total Debt to Capital Ratio. Ans: Total Debt / Total Capital
(liabilities + equity)
⩥ Debt to Equity Ratio. Ans: Total Debt / Total Equity
⩥ Times Interest Earned Ratio. Ans: EBIT / Interest Expense
⩥ Current Ratio. Ans: Current Assets / Current Liabilities
⩥ Quick Ratio. Ans: Cash + Marketable Securities + Receivables /
Current Liabilities
⩥ Cash Ratio. Ans: Cash + Cash Equivalents / Current Liabilities
