FIN 370 Final Exam Homework | Page 6

​ Access to raw materials ​Diversification ​Lower production cost ​All of the above
Which of these statements is true regarding divisional WACC ?
​Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present more risk than the firm ’ s average beta .
​Using a divisional WACC versus a WACC for the firm ’ s current operations will result in quite a few incorrect decisions .
​Using a firmwide WACC to evaluate new projects would have no impact on projects that present less risk than the firm ’ s average beta .
​Using a simple firmwide WACC to evaluate new projects would give an unfair advantage to projects that present less risk than the firm ’ s average beta .
The Rule of 72 is a simple mathematical approximation for __________. ​the number of years required to double an investment
​the payments required to double an investment ​the present value required to double an investment ​the number of years required to double an investment the future value required to double an investment
We can estimate a stock ’ s value by __________. ​using the book value of the total stockholder equity section ​using the book value of the total assets divided by the number of shares outstanding ​discounting the future dividends and future stock price appreciation ​compounding the past dividends and past stock price appreciation