Question 26: Announcements and news contain both an expected component and an unexpected component.

It is the ______________ component that affects a stocks price and therefore its return."

Group of answer choices

expected

unexpected

Question 27

According to the lecture videos, on average, Walmart has a ______________ beta than Target; and Facebook has a _____________ beta than Amazon.

Group of answer choices

lower; lower

lower; higher

higher; lower

higher; higher

Question 28

Bond ABC and Bond XYZ have the same annual coupon rate, but Bond ABC uses annual coupon payments and Bond XYZ uses semi-annual coupon payments. Other things being equal, the price of Bond ___________ is higher.

Group of answer choices

XYZ

ABC

Question 29

If the risk-free rate is 5% and the market return is 11%,

the market risk premium is ___________% and the y-intercept of the SML (security market line) ______________% .

Group of answer choices

5; 6

11; 5

6; 5

7; 5

5: 11

11; 6

Question 30

Use the following information of the next 3 questions:

Global Technology considers investing a total of $30,000 in cloud computing.

• This $30,000 will be 100% depreciated over the three-year life of the project.
• The project will require an initial $10,000 investment in NWC and the tax rate is 20%.
• At the end of the projects life, the fixed assets will be worth $20,000, and Global Technology will recover $9,000 that was tied up in working capital.
• The OCF for the next 3 years is $32,000.

Calculate the CFFA in Yr 0

[Do NOT forget the "-" sign in your answer.]