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GREYUIT [131]
2 years ago
10

an increase in the firm's cost of capital will decrease projects' npvs, which could change the accept/reject decision for any po

tential project. however, such a change would have no impact on projects' irrs. therefore, the accept/reject decision under the irr method is independent of the cost of capital.
Business
1 answer:
castortr0y [4]2 years ago
3 0

An increase in the firm's WACC will decrease project's NPVs, which could change the accept/reject decision for any potential project. However, such a change would have no impact on projects' IRRs. Therefore, the accept/reject decision under the IRR method is independent of the cost of capital. This statement is FALSE.

What is Weighted average cost of capital (WACC)?

The weighted average cost of capital (WACC), which includes common stock, preferred stock, bonds, and other types of debt, is the average after-tax cost of capital for a company. WACC is the typical interest rate a business expects to pay to finance its assets.

Because it expresses the return that both bondholders and shareholders require in order to provide the company with capital in a single number, the weighted average cost of capital is a popular method for calculating the required rate of return. Because investors will want higher returns, a company's WACC is likely to be higher if its stock is very volatile or if its debt is regarded as risky. Additionally, WACC is employed as the discount rate for future discounted cash flow analysis.

To know more about WACC refer:

brainly.com/question/14223809

#SPJ4

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A stock has a correlation with the market of .45. The standard deviation of the market is 21%, and the standard deviation of the
sashaice [31]

Answer:

0.74

Explanation:

The calculation of the stock beta is shown below:

= Stock Correlation with the market × (Standard deviation of the stock ÷ standard deviation of the market)

= 0.45 × (35% ÷ 21%)

= 0.74

Simply we divide the standard deviation of the stock by the standard deviation of the stock and then multiplied it by the stock Correlation with the market so that beta can arrive

5 0
3 years ago
Imagine that in 2019 the economy is in long-run equilibrium. Then stock prices rise more than expected and stay high for some ti
V125BC [204]

In the short-run, the effect on the price level and the real GDP is <em>a. Both the </em><em>price level </em><em>and </em><em>real GDP </em><em>rise.</em>

Since the economy is in long-run equilibrium in 2019, and the stock prices unexpectedly rise and stay high for a long time, it means that the price level does not:

  • Rise while the real GDP falls
  • Fall while the real GDP rises
  • Fall with the real GDP.

<u>Question Options</u>:

a. both the price level and real GDP rise.

b. the price level rises and real GDP falls.

c. the price level falls and real GDP rises.

d. both the price level and real GDP fall.

Thus, in the short-term of this economy both the price level and real GDP rise.

Learn more: brainly.com/question/13029724

6 0
3 years ago
Joseph wants to take out a large loan. He has always paid his bills on time and has a fantastic credit score. He has been with h
oksano4ka [1.4K]

Joseph is probably denied credit due to his bad character, which is an essential element of the Three C's of Credit.

<h3>What are the Three C's of Credit?</h3>

To determine the credibility of a person for grant of a loan or an advance, a lender takes into consideration the Three C's of credit, which are as follows,

  1. Character
  2. Capacity
  3. Capital or Collateral.

Collaterals or Capital help in determination of security of lender from borrower, in case when the borrower is unable to repay the credit. Capacity determines the ability to repay the credit.

Character, on the other hand, helps in determination whether the customer or the borrower's behavior, and the qualities of his or her character in the society.

Hence, the three C's of credit are explained above.

Learn more about the Three C's of Credit here:

brainly.com/question/8743350

#SPJ1

7 0
2 years ago
Suppose that you want to recreate shulte's study in the great wicomico river and make nine reef complexes as shown above. you wo
anyanavicka [17]

Answer:

The best sampling protocol to be used here include <em><u>Random Sampling approach</u></em> to select sites on different reef types from several of the reef complexes.

Explanation:

Random sampling is a part of the sampling technique in which each sample has an equal probability of being chosen.

Simple random sampling is most appropriate when the entire population from which the sample is taken is homogeneous. The sample here is Oyster Density.

Another justification for the use of Random sampling is the size of the population. We are talking about nine reef complexes here. The advantages of a simple random sample include its ease of use and its accurate representation of the larger population.

Cheers!

5 0
3 years ago
Business documents follow a certain format because they have been doing so for years.
FromTheMoon [43]
False i believe 

hope this helps
8 0
4 years ago
Read 2 more answers
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