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response. Match the following A model that relates the risk return trade-offs of individual assets to market returns. A security A Cash Flow is presumed
response. Match the following A model that relates the risk return trade-offs of individual assets to market returns. A security A Cash Flow is presumed to receive risk-free rate of return plus a premium for risk B. Debenture C. Weighted Average Cost of Capital The market value of a firma s assets are less than its liabilities, and the firm has a negative net worth D.Supernormal Growth E. Standard Deviation A value equal to income after taxes plus non cash expenses F. Capital Asset Pricing Model A theory that addresses the relative importance of debt and equity in the overall financing of G. Capital Structure Theory the firm. H. Bankruptcy A measure of volatility of returns on an individual stock relative to the market 1. Beta Superior growth of a firm may achieve during its early years, before leveling off to a more normal growth A measure of the spread or dispersion of a series of numbers around the expected value The computed cost of capital determined by multiplying the cost of each item in the optimal capital structure by its weighted representation in the overall capital structure and summing the results Question 4
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