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Katyanochek1 [597]
2 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]2 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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abruzzese [7]

Answer:

46.07 days

Explanation:

Calculation for the firm's days' sales uncollected for the year

Using this formula

Days' Sales Uncollected Ratio = Ending Accounts Receivable/Net Sales * 365

Let plug in the formula

Days' Sales Uncollected Ratio = ($76,422/$605,500) * 365

Days' Sales Uncollected Ratio = 46.067 days

Days' Sales Uncollected Ratio = 46.07 days Approximately

Therefore the firm's days' sales uncollected for the year is: 46.07 days

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William and Charlotte Collins divorced in November of year 1. William moved out and Charlotte remained in their house with their
anzhelika [568]

Answer: B. Charlotte

Explanation:

Preference is given to people that live with the dependent so this puts William at the least priority because he doesn't live with Autumn thereby leaving Charlotte and her mother.

Preference is then given to the biological parents of the dependent which means that Diana is has second priority. Charlotte is therefore the the most preferred to claim her daughter as a dependent which would allow her greater tax deductions.

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2 years ago
Russell spends an hour studying instead of playing basketball. Russell’s willingness to study is due to the fact that he... Your
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Answer:

c. feels the marginal benefit of an extra hour of studying exceeds the marginal cost of not playing basketball.

Explanation:

Russel made a choice to study for an hour instead of playing basketball. When making choices people weigh the benefits of an action against its opportunity cost.

Opportunity cost is the forgone alternative when we choose to do something.

In this instance Russell chose to study and the opportunity cost was to enjoy playing a basketball game.

For him to choose to study it means he saw the benefit of reading to be greater than the marginal cost of playing basketball. So he chose the most beneficial activity for him.

4 0
3 years ago
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When you are saving or investing, the amount of expected return you receive is based on this:
shutvik [7]

It is Based on The <u>Risk</u><u> </u><u>Level</u><u>.</u><u> </u>

7 0
2 years ago
A(n)
Alex787 [66]

Answer:

Flexible manufacturing systems (FMS)

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FMS stands for the Flexible manufacturing systems, which is described as the method of production, which is designed in order to adapt the changes in the kind and the quantity of the product which is being manufactured.

The computerized systems and the machines could be configured to manufacture the variety of the parts and handle the production changing levels.

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