Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please give me an answers that 136 to 141. Which of the following are factors that influence the weighted average cost of capital (WACC) calculation

image text in transcribedPlease give me an answers that 136 to 141.

Which of the following are factors that influence the weighted average cost of capital (WACC) calculation and is external to the firm? The conditions in the stock market. The corporate tax rate. Changes in interest rates. All of these answers. A company is considering investing in a project that requires the company to take on risks outside of the company's current scope. As a result, which of the following things will happen? The company's stock value would drop unless the project increase the company's expected returns. The company does not have to recalculate its WACC to evaluate the project. The project would decrease the company's cost of equity. All of these things. Which of the following is a problem associated with using the weighted average cost of capital? It may be difficult to find a risk-free rate that corresponds to the investment being analyzed. WACC will vary for the same business based on which method you use. The calculation is not exact as at least one component is an estimate. All of these answers. Calculate the simple payback period for a project with the following cash flows: Year 0: $2000; Year 1: $1000: Year 2: $1000; Year3: $1000: Year 4: $3000, Year 5: $2000 2 years. 3 years. 4 years. 5 years. A company makes an initial $10,000 investment in a project. This project is projected to earn $8000 in year one, $10,000 in year 2, $12,000 in year 3, and $20,000 in year 4. What is the project's IRR? Over 90% less than 50% 40% cannot be determined Two projects each require a $20,000 investment. Project l is projected to earn $8000 in year one, $10,000 in year 2, $12,000 in year 3, and $20,000 in year 4. Project 2 is projected to earn $8000 in year one, $5,000 in year 2, $18,000 in year 3, $5,000 in year 4, and $30,000 in year5. Which project is preferable if your threshold IRR is 40%? Project 1 Project 2 both neither An individual's investment portfolio is composed of60% "blue chip" companies' stock and 40% of large companies' long-term bonds. Based on the composition of this portfolio, this person is probably _______

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Energy Finance And Economics Analysis And Valuation Risk Management And The Future Of Energy

Authors: Betty Simkins, Russell Simkins

1st Edition

1118017129, 978-1118017128

More Books

Students also viewed these Finance questions