Question

10 please
PV13293 Which project creates more value for the firm and why! A) Project B; because it has the largest cash inflow in year 1 ett Aa 3.9 percent for Project B RRE29.21% B) Project A; because it has the larger NPV. C) Project B; because it has the lower required rate of return. D) Project A; because it has the higher required rate of return. E) Project B; because it has the larger NPV Debtholders ndeaest de drections 10) Which of the following is NOT a key difference between debt and equity? VA) Debtholders can influence firm behavior through contractual obligations B Dividend payments are tax deductible whereas interest payments are not C) Creditors' claims on the firm's cash flows and assets are senior to those of the shareholders D) Debt has a stated maturity whereas equity does not VE) Shareholders have a direct voice in the management of the company ehing whereas debtholders do not 11) Which of the following is NOT an implication of market efficiency? A) The risk/return relationship should be positive. held B) Behavioral biases of individuals do not affect stock prices. yun'sconaptie VC) Prices cannot be predicted based on public information. D Investors should avoid investing in stocks that are overvalued. VE) Stock prices exhibit a "random walk". fitma neturns rek ect aM

im sorry. help on 11 pleas

help asap. 11 please

Answer 1

11]

D - This is not an implication because in an efficient market, all stocks are correctly priced and there are no undervalued or overvalued stocks.

A is an implication - Higher risk demands higher return, and lower risk required lower return.

B is an implication - Stock prices are not affected by individual's behavior or their biases.

C is an implication - Prices cannot be predicted, and no investor can beat the market.

E is an implication - Stocks prices are random, and no one can outperform the market