Why is a firms value maximized if it invests to the point where its marginal return on
Question:
Why is a firm’s value maximized if it invests to the point where its marginal return on new investment is equal to its marginal cost of capital?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 0% (2 reviews)
A firms value is maximized when it invests to the point where its marginal return on new investment ...View the full answer
Answered By
Hassan Imtiaz
The following are details of my Professional Experience. Responsibilities Eight years of demanding teaching experience in the field of finance and business studies at Master’s Level. Completion of the given tasks within given time with quality and efficiency. Marketing professional with practical experience in and solid understanding of a diverse range of management applications, including market analysis, sales and marketing, team building and quality assurance. I have excellent skills to approach deal and sustain corporate clients / customers by demonstrating not only extraordinary communication and interpersonal skills but also high caliber presentation, negotiation and closing skills. Manage and follow up the day-to-day activities. Manage and co-ordinate the inventories. Fulfillment of all the tasks assigned.
The following are details of my Areas of Effectiveness. Finance 1. Corporate Finance 2. Advanced Corporate Finance 3. Management of Financial Institutions 4. International Financial Management 5. Investments 6. Fixed Income 7. Real Estate Investment 8. Entrepreneurial Finance 9. Derivatives 10. Alternative Investments 11. Portfolio Management 12. Financial Statement Analysis And Reporting (US GAAP & IFRS) 13. International Financial Markets 14. Public Finance 15. Personal finance 16. Real estate 17. Financial Planning Quantitative Analysis 1. Time Value Of Money 2. Statistics 3. Probability Distribution 4. Business Statistics 5. Statistical Theory and Methods Economics 1. Principles of Economics 2. Economic Theory 3. Microeconomic Principles 4. Macroeconomic Principles 5. International Monetary Economics 6. Money and Banking 7. Financial Economics 8. Population Economics 9. Behavioral Economics International Business 1. Ethics 2. Business Ethics 3. An introduction to business studies 4. Organization & Management 5. Legal Environment of Business 6. Information Systems in Organizations 7. Operations Management 8. Global Business Policies 9. Industrial Organization 10. Business Strategy 11. Information Management and Technology 12. Company Structure and Organizational Management Accounting & Auditing 1. Financial Accounting 2. Managerial Accounting 3. Accounting for strategy implementation 4. Financial accounting 5. Introduction to bookkeeping and accounting Marketing 1. Marketing Management 2. Professional Development Strategies 3. Business Communications 4. Business planning 5. Commerce & Technology Human resource management 1. General Management 2. Conflict management 3. Leadership 4. Organizational Leadership 5. Supply Chain Management 6. Law 7. Corporate Strategy Creative Writing 1. Analytical Reading & Writing Other Expertise 1. Risk Management 2. Entrepreneurship 3. Management science 4. Organizational behavior 5. Project management 6. Financial Analysis, Research & Companies Valuation 7. And any kind of Excel Queries
4.80+
150+ Reviews
230+ Question Solved
Related Book For
Fundamentals Of Financial Management
ISBN: 9780357517574
16th Edition
Authors: Eugene F. Brigham, Joel F. Houston
Question Posted:
Students also viewed these Business questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
The Evolution of the Fashion Industry: Consider the market for clothes and suppose there exist 100 different styles that can be produced and can be arranged (and equally spaced) on a circle. Among...
-
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
-
What is the charge of the iron ion released upon dissolvingFe(NH 4 ) 2 (SO 4 ) 2 ?Remember the charges of the polyatomic ions NH 4 andSO 4 and that the entire compound will be chargeneutral. a). 8+...
-
Maximize f = 20x + 12y + 12z subject to x + z 40 x + y 30 y + z 40 Use the simplex method to maximize the given functions. Assume all variables are nonnegative.
-
(a) Block A in Fig. 5.63 weighs 60.0 N. The coefficient of static friction between the block and the surface on which it rests is 0.25. The weight w is 12.0 N and the system is in equilibrium. Find...
-
Suppose that Merton plc (see Example 9.1 ) replaces the 30,000 paid out as dividends by an issue of shares to new shareholders. Show the statement of financial position after the new issue and...
-
1. Consider the costs/harms and benefits of disclosing non- GAAP financial numbers. What value, if any, do you see in the use of non- GAAP metrics? 2. What responsibilities do auditors currently have...
-
Which of the following is a use of cash? A. Payments to employees B. Increases in accounts payable C. Investment income D. All of the above
-
Explain how a financial manager might estimate his or her firms optimal capital budget.
-
How do flexibility options affect projects NPVs and risk?
-
The Equality Company is now breaking even at sales of \(\$ 400,000\). The company has a total fixed cost of \(\$ 150,000\). The companys budgeted sales for next period are \(\$ 600,000\). What profit...
-
Lazlo s estimates uncollectible accounts to be 0 . 9 % of sales. Its year - end unadjusted trial balance shows Accounts Receivable of $ 1 1 2 , 5 0 0 and sales of $ 9 6 5 , 0 0 0 . If Lazlo s uses...
-
Identify one or two of the best and one or two of the worst work teams on which you served as a member. 1. Identify the top three to five factors that made the team the best or the worst in terms of...
-
ColorCoder is a HousePaint Shop which supplies currently two types of house paints, namely, alpha and beta house paints. The shop is planning to sell a primer (paint base) and the needed paint...
-
which department adds value to a product or service that is observable by a customer?
-
Using Figure 14.1, answer the following questions: a. What was the settle price for July 2022 coffee futures on this date? What is the total dollar value of this contract at the close of trading for...
-
Discuss values as they relate to gender-based marketing?
-
Refrigerant-134a enters an adiabatic compressor as saturated vapor at 120 kPa at a rate of 0.3 m3/min and exits at 1-MPa pressure. If the isentropic efficiency of the compressor is 80 percent,...
-
How should a manager determine the capital structure weights that are used to calculate the WACC?
-
What are the likely effects of a policy in which a company fails to adjust for differences in risk when estimating the cost of capital for their various projects?
-
Hook Industries has a capital structure that consists solely of debt and common equity. The company can issue debt at 11 percent. Its stock currently pays a $2 dividend per share (D0 = $2), and the...
-
3. The nominal interest rate compounded monthly when your $7,000 becomes $11,700 in eight years is ________
-
An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a...
-
Advanced Small Business Certifica Drag and Drop the highlighted items into the correct boxes depending on whether they increase or decrease Alex's stock basis. Note your answers- you'll need them for...
Study smarter with the SolutionInn App