and money is transferred out of a checking account, it is the transfer of funds that constitutes the actual payment for the good
1 answer:
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Answer:
- False
- True
- True
- False
Explanation:
First one is false because diversification reduces risk because it divides the risk amongst different securities. The portfolio risk will therefore be lower than the average of all stocks' standard deviations.
Second one is true because unsystematic risk is risk that will come with the type of stock or security purchased. It is usually referred to as diversifiable risk because using negatively correlated stocks can help diversify this risk.
Third one is True because the portfolio's risk when diversified is indeed likely to be smaller than the average of all stocks' standard deviation.
Fourth one is false because portfolio risk is <em>reduced</em> if stock that are negatively correlated are put into a portfolio because it means that when one stock is not doing so well, the other being negatively correlated, will be doing fine.
Answer:
The after-tax weighted average cost of capital for Ronnie's Commics is 9.6%
Explanation:
WACC is calculated by the formula
=
According to the information given in the question,
E+D= $250,000,000 + $750,000,000 = $1,000,000,000
E = $250,000,000
D = $750,000,000
T = 35%
Re = 15%
Rd = 12%
Substituting the values in the formula,
=
= 3.75 + 5.85 = 9.6%