Answer: Return on a risky security minus the risk-free rate.
Explanation:
The excess return is known to be the amount of return on a risky asset that exceeds the return that one would have received had they invested in a risk-less asset such as Treasury Bills.
If the return you received on shares was 5% and the return on riskfree assets is 2%, your excess return is 3%.
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Answer:
Diffused ownership of the company is more the exception than the rule.
Explanation:
Outside the United States and the United Kingdom, diffused ownership is more the exception than the rule mostly because the forms of diffuse corporate ownership tend to have an American or British origin, and from the U.S. and the U.K., they expand to other countries with time.
For example, Limited Liability Companies is a type of company with diffused ownership, and has been exported with different names to other countries, becoming more popular with time.
Answer: statement E
Explanation: The correct answer for this case would be "become more risky and also have an increasing WACC . Its intrinsic value will not be maximized. WACC is the cost of capital at a given point in time at average risk of the company. To evaluate different projects for different level of risks we shave to adjust WACC as per the level of risk. Thus same WACC for different level of projects will result in high risk of failure of projects but the real value of company will never increase .
Answer:
b. evaluate performance
Explanation:
Simply stating that previous work and performance was satisfactory is not enough for the business to grow. In order to state a sentence like in the example, Craig has to be concrete with performance analyses, meaning he and his team need to determine what caused such a spike in sales.
Good practice has to be determined and documented in order to be continuously used.
