does more than one apply? which should be checked thanks
Homework Answers
Marginal cost of capital will be the minimum rate which will be required by the investors of the company because this will be treated as the handle rate for making investment.
it can also be called the weighted average of the cost of debt and equity provided to the company by all the investors and the creditors.
it is not related to maintenance of the stock price or cost of existing projects.
Correct answer would be option (A) and option (E)
Add Answer to:
does more than one apply? which should be checked
thanks
✓ Saved Question 3 (4 points)...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity provided to the company by all investors and creditors. rate of return the firm must earn on its investments, in order to maintain its stock price. minimum rate of return that investors require for providing capital to the company discount rate used to evaluate the cash flows of investment projects with the same risk as the firm's existing assets....
1. security analyst or marginal investors or company vendors 2.minimize or maintain the initial level of...
1. security analyst or marginal investors or company
vendors
2.minimize or maintain the initial level of or maximize
3. more than or less than or equal to
4.crossover or hurdle or indifference
5.managers or vendors or investors
6. notes payable accounts payable or long term debt
7.a or b or c or d or e
Question 1 of 10 Check My Work (5 remaining) Companies issue bonds, preferred stock, and common equity to raise capital to invest in capital budgeting...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate must be high to compensate investors for the project's risk. The return that shareholders require from the company as a compensation for their investment risk is referred to as the cost of equity. Consider this case: Weghorst Co, is a 100% equity-financed company (no debt or preferred stock); hence, its WACC equals its cost of common equity. Weghorst Co.'s retained earnings will be sufficient...
Only say choice 8. In order to maximize firm value, management should invest in new assets...
Only say choice
8. In order to maximize firm value, management should invest in new assets when the internal rate of retum a. greater or equal to the firm's marginal cost of capital. b. greater than the cost of debt financing. c. less than or equal to the accounting rate of return. 9. The cost of capital is: a. the opportunity cost of using funds to invest in new projects. b. the rate of return the firm must ean on...
Question 1 (1 point) Company A has an internal cost of capital of 7% annually. It...
Question 1 (1 point) Company A has an internal cost of capital of 7% annually. It is evaluating its investment options against its internal costs and has identified three potential investments: Investment A: Bond with annual returns of 8% Investment B: Bond with annual returns of 4% Investment C: Bond with annual returns of 12% Which of the above investments should the company consider taking on given its internal cost of capital? O A only C only A and C...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate must be high to compensate investors for the project's risk. The return that shareholders require from the company as a compensation for their investment risk is referred to as the cost of equity. Consider this case: Weghorst Ltd is a 100% equity-financed company (no debt or preference shares); hence, its wACC equals its cost of equity. Weghorst Ltd's retained earnings will be sufficient to...
please complete all parts to the question 6. Within-firm risk and beta risk Understanding risks that...
please complete all parts to the question
6. Within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net International has manufacturing, distribution, retail, and consulting divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low-risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divisions will be profitable. The...
Answer any 4 questions. You are advised to be as analytical as possible in your answers A. Explai...
Answer any 4 questions. You are advised to be as analytical as possible in your answers A. Explain the main theoretical underpinnings of minimum cost analysis. B. Discuss how you would reduce the heat loss and energy costs of a building that you own 2. A. Explain the concept of weighted average cost of capital (WACC). B. The firm's cost f capital is affected by two sets of factors - one that is under the firm's control, and the other...
I am a bit confused about this question and need the help (Project Management). Thanks Use...
I am a bit confused about this question and need the help (Project Management). Thanks Use the case below to answer questions 1 & 2 (Adapted from PMBOK 6) Company A was established 4 years ago. Its founders have recently become concerned about the competitiveness of the firm’s offerings and have asked the directors of product development and marketing to work together and prepare a list of potential projects. The product development and marketing directors identified three projects related to...
PROBLEM 4 The capital structure of the Valley Products Company is as shown below, on April...
PROBLEM 4 The capital structure of the Valley Products Company is as shown below, on April 30, 2019. Long term Debt (8%) $ 128,000,000 Common Stockholders equity (8 million shares) 192,000,000 = $ 320,000,000 The company believes this capital structure to be optimal and therefore desires to maintain it. That is, DO NOT CHANGE IT. The company estimates next years net income, NII, will be $48 million. Its payout ratio is expected to remain at 25 percent. New bonds...
(Select all relevant.] A firm's marginal cost of capital is the weighted average of the cost of the debt and equity provided to the company by all investors and creditors. rate of return the firm must earn on its investments, in order to maintain its stock price. minimum rate of return that investors require for providing capital to the company discount rate used to evaluate the cash flows of investment projects with the same risk as the firm's existing assets....
1. security analyst or marginal investors or company
vendors
2.minimize or maintain the initial level of or maximize
3. more than or less than or equal to
4.crossover or hurdle or indifference
5.managers or vendors or investors
6. notes payable accounts payable or long term debt
7.a or b or c or d or e
Question 1 of 10 Check My Work (5 remaining) Companies issue bonds, preferred stock, and common equity to raise capital to invest in capital budgeting...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate must be high to compensate investors for the project's risk. The return that shareholders require from the company as a compensation for their investment risk is referred to as the cost of equity. Consider this case: Weghorst Co, is a 100% equity-financed company (no debt or preferred stock); hence, its WACC equals its cost of common equity. Weghorst Co.'s retained earnings will be sufficient...
Only say choice
8. In order to maximize firm value, management should invest in new assets when the internal rate of retum a. greater or equal to the firm's marginal cost of capital. b. greater than the cost of debt financing. c. less than or equal to the accounting rate of return. 9. The cost of capital is: a. the opportunity cost of using funds to invest in new projects. b. the rate of return the firm must ean on...
Question 1 (1 point) Company A has an internal cost of capital of 7% annually. It is evaluating its investment options against its internal costs and has identified three potential investments: Investment A: Bond with annual returns of 8% Investment B: Bond with annual returns of 4% Investment C: Bond with annual returns of 12% Which of the above investments should the company consider taking on given its internal cost of capital? O A only C only A and C...
In financial analysis, it is important to select an appropriate discount rate. A project's discount rate must be high to compensate investors for the project's risk. The return that shareholders require from the company as a compensation for their investment risk is referred to as the cost of equity. Consider this case: Weghorst Ltd is a 100% equity-financed company (no debt or preference shares); hence, its wACC equals its cost of equity. Weghorst Ltd's retained earnings will be sufficient to...
please complete all parts to the question
6. Within-firm risk and beta risk Understanding risks that affect projects and the impact of risk consideration Yatta Net International has manufacturing, distribution, retail, and consulting divisions. Projects undertaken by the manufacturing and distribution divisions tend to be low-risk projects, because these divisions are well established and have predictable demand. The company started its retail and consulting divisions within the last year, and it is unknown if these divisions will be profitable. The...
Answer any 4 questions. You are advised to be as analytical as possible in your answers A. Explain the main theoretical underpinnings of minimum cost analysis. B. Discuss how you would reduce the heat loss and energy costs of a building that you own 2. A. Explain the concept of weighted average cost of capital (WACC). B. The firm's cost f capital is affected by two sets of factors - one that is under the firm's control, and the other...
Most questions answered within 3 hours.
-
Industry: Telecommunications in India
Here, you need to discuss the sources of the growth pattern
and...
asked 42 minutes ago -
Hydrobromic acid
dissolves solid iron according to the followiaung reaction:
Fe(s)+2HBr(aq)→
FeBr2(aq)+ H2(g)
Part A. What...
asked 2 hours ago -
Verify the following vector identity in SPHERICAL
COORDINATES.
div(curl(A)) = 0
asked 4 hours ago -
The work function (Φ) for a metal is 7.50×10-19 J.
What is the longest wavelength (nm)...
asked 4 hours ago -
1. Would the following procedural changes cause the
calculated mass percent Ni2+ ion in Ni(NH3)nCl2 to...
asked 6 hours ago -
1. Why does the voltage of the capacitor vary with frequency?
where does this missing voltage...
asked 7 hours ago -
p p please write each step out clearly
3. A manager of a company is considering...
asked 6 hours ago -
On October 1, Ebony Ernst organized Ernst Consulting; on October
3, the owner contributed $83,540 in...
asked 7 hours ago -
A.)As an electron moves through a region of space, its speed
decreases from 9.60 × 106...
asked 7 hours ago -
In java with the netbeans program do:
Through object programming
Create a class "ContadorP", which is...
asked 7 hours ago -
Pattern Corporation acquired all of Science
Company's outstanding stock on January 1, 2016 for $600,000 cash....
asked 7 hours ago -
Here are all accounts Tyler Co. maintains.
Tax expenses $4,750
Common stocks $48,840
SG&A expenses $2,500...
asked 8 hours ago