You look like you seem fun to hang around!
I wish I could help you but your question doesn’t make any sense can you please type it again?
Answer:
a. 6.9
Explanation:
55/8 = 6.875 = 6.9
This means purchase a share of this company is paying 6.9 times his annual earnings.
<u>It could be interpreted both ways:</u>
- if this is high, the market can expect to grow their earnings soon or...the share is overstated and will not increase his value shortly.
- If this is considered low, then the market expects its earnings to decrease or ... the share is understated and will increase their valuation soon
Mutual funds carry less risk compared to single stocks
because mutual funds are more convenient and diversified. Mutual funds are
being professionally managed by money managers. They are responsible in allocating
the money to stocks, bonds or other money market securities.
Answer:
D: The accept/reject decision depends on the firm's risk-adjustment policy. If Norris' policy is to increase the required return on a riskier-than average project to 3% over rs, then it should reject the project
Explanation:
Please refer the complete question:
Which of the following statements is correct?
a. The project should definitely be accepted because its expected return (before any risk adjustments) is greater than its required return.
b. The project should definitely be rejected because its expected return (before risk adjustment) is less than its required return.
c. Riskier-than-average projects should have their expected returns increased to reflect their higher risk. Clearly, this would make the project acceptable regardless of the amount of the adjustment.
d. The accept/reject decision depends on the firm's risk-adjustment policy. If Norris' policy is to increase the required return on a riskier-than-average project to 3% over rS, then it should reject the project.
e. Capital budgeting projects should be evaluated solely on the basis of their total risk. Thus, insufficient information has been provided to make the accept/reject decision.
