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Katyanochek1 [597]
3 years ago
9

Firm M's earnings and stock price tend to move up and down with other firms in the S&P 500, while Firm W's earnings and stoc

k price move counter cyclically with M and other S&P companies. Both M and W estimate their costs of equity using the CAPM, they have identical market values, their standard deviations of returns are identical, and they both finance only with common equity. Which of the following statements is CORRECT?
a. M and W should have identical WACCs because their risks as measured by the standard deviation of returns are identical.
b. M should have the lower WACC because it is like most other companies, and investors like that fact.
c. If M and W merge, then the merged firm MW should have a WACC that is a simple average of M's and W's WACCs.
d. Without additional information, it is impossible to predict what the merged firm's WACC would be if M and W merged.
e. Since M and W move counter cyclically to one another, if they merged, the merged firm's WACC would be less than the simple average of the two firms' WACCs.

please give me why
Business
1 answer:
sweet-ann [11.9K]3 years ago
3 0

Answer:

The answer is letter C.

Explanation:

The correct statement is If M and W merge, then the merged firm MW should have a WACC that is a simple average of M's and W's WACCs.

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18) Any consideration of the true costs of sprawl must include ________. A) the restoration of natural areas in inner cities B)
skad [1K]

Answer:

Option D.

Explanation:

Any consideration of the true costs of sprawl must include the increased use of fossil fuels

Fossil fuel is a fuel formed from the decayed plants and animals that have been converted to crude oil, coal or natural gas over hundreds of millions of years by exposure to heat and pressure in the earth's crust.

Option D. is correct.

8 0
4 years ago
The following transactions were completed by the company.
siniylev [52]
  • The impact of the following transactions should be shown on the accounting equation below:

  1. The accounting equation comprises equity, liabilities, and assets.
  2. In this, the sum of the stockholder equity and the liabilities should be equivalent to the total assets.
  3. It analyzed the financial position, performance of the company.

Therefore we can conclude that the attachment i.e. attached represent the impact of the given transactions on the accounting equation.

Learn more about the accounting equation here: brainly.com/question/14689492

6 0
3 years ago
Read 2 more answers
Suppose the reserve requirement is 10%.
mestny [16]

Answer:

1)

B. more reserves, thus increasing the money multiplier and increasing the money supply.

In a fractional-reserve banking system, banks create money when they make loans. The more money they have available to make loans, the more money they create.

If the Fed reduces the reserve-requirements, banks will have more reserves available to loan out, increasing the money multiplier, and thus, the money supply.

2)

A. rarely changes the reserve requirement and does not use the reserve requirement as a major monetary policy tool.

The Fed rarely uses this monetary policy tool because it is the most powerful one. Changing the reserve requirements effectively reduce or increase the money supply like no other monetary policy tool, therefore, the effects can be dramatic, and its use is a sign that all other tools have been exhausted (open-market operations, and discount window mainly).

Explanation:

3 0
4 years ago
"11 Item 11Item 11 The following events took place at a manufacturing company for the current year: (1) Purchased $95,000 in dir
Naily [24]

Answer:

The the value of the ending Finished Goods Inventory $24,628,50

Explanation:

See attached file

5 0
3 years ago
Suppose an industry earns a rate of return of 10%, which is twice as high as that of competitive industries, 5%. How much is the
sergey [27]

Answer:

Let us assume that both the industries are having an investment of $100,000

The profit of the given industry which is having 10% rate of return will be $100,000 * 10% = $10,000

The other industry which is having the Rate of return of 5% will earn a profit of $100,000 * 5% = $5000.

As the capital is just half of the revenue, it signifies that the total revenue will be $200,000 . So the same value of $10,000 will be 5% of the total revenue.  On the other hand, $5,000 would be 2.5% of total revenue.

Thus, the first stated industry will charge 2.5% more than the other industry.

6 0
4 years ago
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