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Interest rate risk
Credit quality risk
Reinvestment rate risk
Liquidity rate risk
What are reasons for the firm to go abroad?
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