FIN 571 Week 4 DQ 1 FOR MORE CLASSES VISIT www . fin571tutor . com
A firm uses a single discount rate to compute the NPV of all its potential capital budgeting projects , even though the projects have a wide range of nondiversifiable risk . The firm then undertakes all those projects that appear to have positive NPVs . Briefly explain why such a firm would tend to become riskier over time .
===================================================================================== FIN 571 Week 4 DQ 2 FOR MORE CLASSES VISIT www . fin571tutor . com
Phyllis believes that the firm should use straight-line depreciation for a capital project because it results in higher net income during the early years of the project ’ s life . Joanna
c . Which are more relevant ? 13 . Titan Mining Corporation has 8.9 million shares of common stock outstanding and 330,000 5 percentsemiannual bonds outstanding , par value $ 1,000 each . The common stock currently sells for $ 37 per share and has a beta of 1.45 , and the bonds have 15 years to maturity and sell for 118 percent of par . The market risk premium is 7.7 percent , T-bills are yielding 4 percent , and the company ’ s tax rate is 40 percent .
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FIN 571 Week 4 DQ 1 FOR MORE CLASSES VISIT www . fin571tutor . com
A firm uses a single discount rate to compute the NPV of all its potential capital budgeting projects , even though the projects have a wide range of nondiversifiable risk . The firm then undertakes all those projects that appear to have positive NPVs . Briefly explain why such a firm would tend to become riskier over time .
===================================================================================== FIN 571 Week 4 DQ 2 FOR MORE CLASSES VISIT www . fin571tutor . com
Phyllis believes that the firm should use straight-line depreciation for a capital project because it results in higher net income during the early years of the project ’ s life . Joanna