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zhannawk [14.2K]
3 years ago
10

Which of the following statements is CORRECT? a. Because of tax effects, an increase in the risk-free rate will have a greater e

ffect on the after-tax cost of debt than on the cost of common stock as measured by the CAPM. b. If a company's beta increases, this will increase the cost of equity used to calculate the WACC, but only if the company does not have enough reinvested earnings to take care of its equity financing and hence must issue new stock.
Business
1 answer:
Anastaziya [24]3 years ago
4 0

Answer: I found the complete Question: Which of the following statements is CORRECT?

a. Because of tax effects, an increase in the risk-free rate will have a greater effect on  the after-tax cost of debt than on the cost of common stock as measured by the  CAPM.

b. If a company's beta increases, this will increase the cost of equity used to calculate  the WACC, but only if the company does not have enough reinvested earnings to  take care of its equity financing and hence must issue new stock.

c. When calculating the cost of preferred stock, companies must adjust for taxes,  because dividends paid on preferred stock are deductible by the paying  corporation.

d. Higher flotation costs reduce investors' expected returns, and that leads to a  reduction in a company's WACC.

e. When calculating the cost of debt, a company needs to adjust for taxes, because  interest payments are deductible by the paying corporation.

And the correct answer is "e. When calculating the cost of debt, a company needs to adjust for taxes, because  interest payments are deductible by the paying corporation.".

When calculating the cost of debt issuance, the company, in addition to taking into account the issuance costs, must calculate the cost adjusted for taxes because interest payments are deductible for debt issuing companies.

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One major negative effect of globalization has been:
aleksandrvk [35]

Answer:

A. environmental damage due to increased production.

Explanation:

Globalization can be defined as the strategic process which involves the integration of various markets across the world to form a large global marketplace.

Basically, globalization makes it possible for various organizations to produce goods and services that is used by consumers across the world.

Hence, one of the major advantages of globalization is that, it has ensured or made it possible such that economic and environmental conditions in different countries of the world are related and linked with the intention of generating revenue and profits while providing goods and services to meet the demands or requirements of various consumers across the world.

However, one major negative effect of globalization has been environmental damage or pollution due to increased production by various companies across the world.

Pollution can be defined as the physical degradation or contamination of the environment through an emission of harmful, poisonous and toxic chemical substances.

4 0
3 years ago
Coca-Cola has supported numerous health and sporting cause, but to what extent is this genuine CSR.
svetoff [14.1K]

Answer:

Considerable extent

Explanation:

Note that CSR (Corporate social responsibility) entails that an organization gives back to its community or environment in which it operates in areas such as financing community developmental projects, providing employment etc.

Coca-Cola, therefore, has done what CSR entails although it could still do more by reducing the environmental pollution coming from its factories, reducing the calories found in its drinks etc.

5 0
3 years ago
After successfully operating for five years, Tina plans to sell her computer service center. Which of the following would be Tin
Sunny_sXe [5.5K]

Answer:

Optimizing capital structure for profits

Explanation:

When an entrepreneur wants to sell her business to another small business or a larger company, she should try to maximize the value of their current business. A way to do this is by optimizing the business's capital structure (e.g. lower the debt to capital ratio). Tina will be able to sell her business at a higher cost and the new owner will have a healthier and potentially more profitable business to run.

8 0
3 years ago
Thirty percent of households say they would feel secure if they had​ $50,000 in savings. You randomly select 8 households and as
marin [14]

Answer: a) 0.04667544

b) 0.01129221

c) 0.98870779

Explanation:

Binomial probability formula :-

P(x)=^nC_xp^x(1-p)^x, where P(x) is the probability of getting success in x trials, n is the total number of trials and p is the probability of getting success in each trial.

Given : The probability of households say they would feel secure if they had​ $50,000 in savings = 0.30

Total number of households selected = 8

a) The probability that the number that say they would feel secure is exactly​ five will be :-

P(5)=^8C_{5}(0.30)^5(0.70)^3\\\\=56(0.3)^5(0.7)^3=0.04667544

b) The probability that the number that say they would feel secure is more than​ five :-

P(x>5)=P(6)+P(7)+P(8)\\\\=^8C_{6}(0.30)^6(0.70)^2+^8C_{7}(0.30)^7(0.70)^1+^8C_{0}(0.30)^8(0.70)^0\\\\=28(0.30)^6(0.70)^2+8(0.30)^7(0.70)^1+(0.30)^8\\\\=0.01129221

c) The probability that the number that say they would feel secure is at most five :-

P(x\leq5)=1-P(x>5)\\\\=1-0.01129221=0.98870779

7 0
3 years ago
Saving is:___________. 1. a sophisticated IOU that documents who owes how much and when payment must be made. 2. the desire to h
Greeley [361]

<u>Answer:</u> Option 4

<u>Explanation:</u>

Savings means a portion of the income which is not spent kept for creating value for money. The savings is the excess amount after meeting essential expenses. Savings is the amount that is used to create wealth.

By gradually saving the money one can investment them in any kind of assets to increase the value of the money. Savings is also useful to meet the future expenses. The income left out after meeting the expenditure is known as savings.

4 0
3 years ago
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