Question
For a multi-product firm, if a project's beta is NO different from that of the overall firm, then the: a. project should be discounted using
For a multi-product firm, if a project's beta is NO different from that of the overall firm, then the:
a. project should be discounted using the overall firm's beta.
b. CAPM can no longer be used.
c. project should be discounted at the T-bill rate.
d. project should be discounted at the market rate.
e. project should be discounted at a rate commensurate with its own beta.
Buyers discount the price they are willing to pay because of adverse selection, in a world with information asymmetry, is based on:
a.
credibility principle.
b.
pecking order hypothesis.
c.
lemons principle.
d.
signaling theory of debt.
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