subject
Business, 04.11.2019 21:31 lmh40

Which of the following statements is correct? a. if the calculated beta underestimates the firm's true investment risk⎯i. e., if the forward-looking beta that investors think exists exceeds the historical beta⎯then the capm method based on the historical beta will produce an estimate of rs and thus wacc that is too high. b. beta measures market risk, which is, theoretically, the most relevant risk measure for a publicly-owned firm that seeks to maximize its intrinsic value. this is true even if not all of the firm's stockholders are well diversified. c. an advantage shared by both the dividend growth model and capm methods when they are used to estimate the cost of equity is that they are both "objective" as opposed to "subjective," hence little or no judgment is required. d. the specific risk premium used in the capm is the same as the risk premium used in the bond-yield-plus-risk-premium approach. e. the discounted cash flow method of estimating the cost of equity cannot be used unless the growth rate, g, is expected to be constant forever.

ansver
Answers: 1

Another question on Business

question
Business, 22.06.2019 05:30
The struter partnership has total partners’ equity of $510,000, which is made up of main, capital, $400,000, and frist, capital, $110,000. the partners share net income and loss in a ratio of 80% to main and 20% to frist. on november 1, adison is admitted to the partnership and given a 15% interest in equity and a 15% share in any income and loss. prepare journal entries to record the admission of adison for a 15% interest in the equity and a 15% share in any income and loss under the following independent assumptions. (1) record the admission of adison with an investment of $90,000 for a 15% interest in the equity and a 15% share in any income and loss. (2) record the admission of adison with an investment of $120,000 for a 15% interest in the equity and a 15% share in any income and loss. (3) record the admission of adison with an investment of $80,000 for a 15% interest in the equity and a 15% share in any income and loss.
Answers: 1
question
Business, 22.06.2019 19:00
When making broccoli cream soup, the broccoli and aromatics should be a. burned. b. simmered. c. puréed. d. sweated.
Answers: 2
question
Business, 22.06.2019 19:30
The owner of firewood to go is considering buying a hydraulic wood splitter which sells for $50,000. he figures it will cost an additional $100 per cord to purchase and split wood with this machine, while he can sell each cord of split wood for $125. if, for this machine, design capacity is 50 cords per day, effective capacity is 40 cords per day, and actual output is expected to be 32 cords per day, what would be its efficiency?
Answers: 1
question
Business, 22.06.2019 21:30
Abond purchased for $950 was sold for $980 after one year. the interest received during the year is $25. the bond's yield is:
Answers: 1
You know the right answer?
Which of the following statements is correct? a. if the calculated beta underestimates the firm's tr...
Questions
question
Chemistry, 29.09.2019 19:30
question
Chemistry, 29.09.2019 19:30
Questions on the website: 13722367