Which of the following is the best example of correlation not being the same as causation? A. A company redesigns a production process and afterwards it takes less time to produce products. The company concludes that redesigning processes causes production efficiency gains. B. After a poorly performing quarter, a company sends out coupons in the mail and sees an increase in sales. The company concludes that sending coupons causes sales to increase. C. A company pays sales employees more for each sale and each employee starts selling more goods. The company concludes that paying employees more for a sale causes employees to sell more items. D. During an economic downturn, a company changes its computer policy to only allow purchases of windows-based laptops and see profits go down. The company concludes that windows-based laptops cause profits to go

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

The textbook defines ethics as “the principles of conduct governing an individual or a group,” and specifically as the standards one uses to decide what their conduct should be. to what extent do you believe that what happened at bp (british petrolium) is as much a breakdown in the company’s ethical systems as it is in its safety systems, and how would you defend your conclusion?

Why is investing in a mutual fund less risky than investing in a particular company’s stock?