Answer:
The correct option is A, abnormal price change at the announcement
Explanation:
Abnormal price increase before the announcement would only be the case if the there was insider dealing, that is there exists information leakage.
An abnormal price decrease cannot be the case, the market prices a share based on its earnings' strength, in other words a stock with high dividends prospect is priced high.
Option D is wrong there would a price change stemming from the announcement made about large cash dividends payout
Answer: 9.48%
Explanation:
Given Data
Debts ;
$7 billion
$2 billion
$13 billion
Beta of Fords stock = Beta = 1.50
Market risk premium = Rp = 8.0%
Risk free rate of interest = Rf = 4.0%
Equity rate = 1.7
Market risk rate = 0.8
Risk free rate = 0.03
Therefore;
Cost of Equity ( Re ) = Risk free rate + equity rate × market risk premium
= 0.03 + (1.7 × 0.8)
= 0.166
Preferred Stock Cost ( PSC)= Dividend ÷ stock price
= 4 ÷ 30
= 0.1333
Total debt = 13 + 6 + 2 = 21 billion
D% = 13 billion ÷ 21 billion
= 0.619
E% = 6 billion ÷ 21 billion
= 0.286
P% = 2 billion ÷ 21 billion
= 0.095
RD = debt capital at 8% maturity rate
Tc= 30%
Rwac =(w/ preferred stock)
= Re × E% + PSC × P% + Rd ( 1- Tc) D%
Rwac = (0.166)(0.286) + (0.1333)(0.095) + (0.08)(1- 0.3)*(0.619)
= 0.094803 * 100
= 9.48%
At 30% tax rate Ford weighted average cost is 9.48%
Answer:
1. Illegal
2. illegal: forbidden by law
Answer:
The answer is 4. licensing
Explanation:
Licensing is a agreement in which a business allows a foreign firm to produce its goods or services or use its brand or design or use it patent for a fee. It is a marketing strategy.
In this question, Sodima(a French company) produces Yoplait. Sodima allows General Mills(in United States) to sell its Yoplait in the United States for a fee.
It is known as licensing.
