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A Canadian oil company is considering whether or not to develop a site it has been exploring for the past six months. One of the
A Canadian oil company is considering whether or not to develop a site it has been exploring for the past six months. One of the arguments for developing the site is that considerable time and money have already been expended. This cost should not be included in the capital budgeting decision because it is: Oa. An operating cost Ob. An opportunity cost OC. An agency cost O d. A financing cost Oe. A sunk cost M Assume CAPM is a correct model, which of the following statement is correct? Oa. The beta of an overpriced stock should be greater than 1 O b. The expected return of a fairly priced stock should lie above the SML O c. The expected return of an over-priced stock should lie below the SML O d. The beta of an overpriced stock should be less than 1 O e. The beta of a fairly priced stock should equal to 1
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