Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 1 All else held constant, which one of these is most apt to increase the WACC of a leveraged firm? a. a decrease in
Question 1
All else held constant, which one of these is most apt to increase the WACC of a leveraged firm?
a. a decrease in the dividend growth rate
b. a decrease in the tax rate
c. a decrease in a firms equity beta
d. an increase in the risk-free rate when the equity beta > 1
e. an increase in the weight of debt
Question 2
The profitability index of an investment project is the ratio of the: a. present value of the Time 1 and subsequent cash flows to the initial cost. b. net present value of the projects cash outflows divided by the net present value of its inflows. c. internal rate of return to the current market rate of interest. d. net present value of every project cash flow to the initial cost. e. average net income to the average investment.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started