1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
joja [24]
3 years ago
13

Suppose a firm estimates its WACC to be 10%. Should the WACC be used to evaluate all of its potential projects, even if they var

y in risk? If not, what might be "reasonable" costs of capital for average-, high-, and low-risk projects?
Business
1 answer:
Mademuasel [1]3 years ago
6 0

Answer:

The WACC will be 10% for average risk

below when the risk is low

and above 10% when the risk is higher than average

as the cost of capital (required return from the stockholders) will increase pushing the WACC higher

Explanation:

As the WACC is composed by the cost of debt and the cost of equity a higher risk will require a better return for the investor thus, the equity proportion that determinates the WACC will change along the project risk.

You might be interested in
A fixed-income security pays Group of answer choices a variable level of income for owners on a fixed income. a fixed level of i
nydimaria [60]

Answer:

C. A fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security

Explanation:

A fixed income security is a type of investment that provides returns  in  form of  regular, or fixed, interest payments and repayments of the principals when the security reaches maturity.  

From the explanation above, the best possible answer is C. A fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security    

7 0
3 years ago
You are considering investing in a security that will pay you $80 in interest at the end of each of the next 10 years. If this s
elena55 [62]

Answer:

the internal rate of return is 6%

Explanation:

The computation of the irr is shown below

Given that

Initial investment = $588.81

And yearly cash flows for the next 10 years is $80

Now for determining the internal rate of return we have to apply the formula

= IRR()

After applying the internal rate of return formula, the internal rate of return is 6%

Hence, the internal rate of return is 6%

7 0
3 years ago
Leslie loves to shop at T.J. Maxx and feels she is saving a lot of money because the price tags usually have the manufacturer's
Vilka [71]

Answer: Reference price  

Explanation:

 According to the question, the manufacturer suggested retail prices (MSRP) is basically used as the the reference price as it is refers to the price where the buyer willing to pay the price for the products and the services in the market.

It is also known as the competitor pricing and the reference pricing is mainly used by the high volume buyers.

The reference price make easily accessing the quality of the products and its actual price to the customers in the market for avoid any type of confusion.    

Therefore, Reference price is the correct answer.    

7 0
3 years ago
The need to develop new customers is extremely important. Some studies estimate that the average company loses​ ________ percent
VikaD [51]

Answer:

The correct answer is letter "C": 15-20.

Explanation:

Different researches have helped businesses concluded that around <em>15% to 20%</em> of them lose their customers year after year. From them, almost 60% goes to the business's competitor and the other 40% substitute the good or service in reference. The main reason why individuals break up their relationship with companies is because of the treatment they received while others are dissatisfied with the good or service.

So, <em>customer service is a key feature at the moment of determining clients' loyalty to the firm.</em>

5 0
3 years ago
What should you do before you approach a atm
kap26 [50]

Answer:

Try to use ATMs with which you are familiar. Choose well-lit, well-placed ATMs where you feel comfortable. If you need to use an ATM late at night, ask a friend to accompany you.

Before approaching the ATM, scan the surrounding area. Avoid the ATM altogether if it is too dark to see, isolated or looks unsafe. If there are bystanders loitering in the area, go to another machine or come back later.

Use your body to shield the screen and keypad before entering your PIN. Make sure other individuals in line stay a reasonable distance from you while you're performing your transaction.

6 0
3 years ago
Other questions:
  • Singapore Airlines is recognized as an industry leader for exemplary customer service, and has continued to add new ways to serv
    9·1 answer
  • Identify and describe the three steps that the team should follow in order to define project scope and create a project scope st
    15·1 answer
  • How to get unsuspended from my basketball team
    9·1 answer
  • Which statement is FALSE concerning the skin's role in protection?Which statement is FALSE concerning the skin's role in protect
    13·1 answer
  • Sanyo Corporation manufactures a popular model of business calculators in a suburb of Seoul, South Korea. The production process
    6·1 answer
  • Sponsorship is an effective marketing strategy, particularly for sporting goods and recreational equipment.
    11·1 answer
  • Please helpppppppp (sorry Need to get the word limit in)
    14·1 answer
  • Here a rap what yall think its called disrespect
    14·2 answers
  • How to write a recommendation letter for a student?.
    9·1 answer
  • heywood yapinchme works in the it department at pain, inc. after finding out that the company is planning to purchase four more
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!