How does a toehold help overcome the free rider problem? (Select the best choice below.) A. Free riders usually acquire a toehold in order to give an incentive for an acquirer to take over the remainder of the company and provide value-added improvements. B. Since the free riders gain the full amount of the value improvement on the shares acquired as a toehold, the free riders are likely to sell their shares to the acquirer, allowing the takeover to go forward. C. Since the acquirer gains the full amount of the value improvement on the shares acquired as a toehold, a toehold provides an incentive to undertake the acquisition, even if the acquirer must pay a price equal to the with-improvement value for the rest of the shares. D. Once the acquirer has a toehold, free riders no longer can make as much money as they would

How could brian, who doesn't want his car insurance premiums to increase, show he poses a low risk to his insurance company? a: drive safely to avoid accidents and traffic citations b: wash and wax his car regularly to keep it clean c: allow unlicensed drivers to drive carelessly in his car d: incur driver's license points from breaking driving laws

Jewelry manufacturers produce a range of products such as rings, necklaces, bracelets, and brooches. what fundamental economic question are they addressing by offering this range of items?

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity.calculate the cost of new stock using the dividend growth approach.what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics.each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings.equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g