Answer:
a. Project Low because its expected rate of return is higher than its WACC
Explanation:
Weighted Average Cost of Capital WACC determines firms cost of capital. It includes all sources of finance which are included in firm capital structure. The expected rate of return is the rate at which a project is able to generate return or benefits. For any project to be beneficial, its expected return should be higher than its WACC. We will select project Low because its expected rate of return is higher than its WACC.
Answer:
(a) The stock price of Harrods be after the acquisition is £ 31.45
(b) The exchange ratio between the two stocks would be 0.8550
Explanation:
Harrods PLC has a market value of £139 million and 5 million shares outstanding.
Selfridge Department Store has a market value of £41 million and 2 million shares outstanding.
a) If Harrods offers 1.2 million shares of its stock in exchange for the 2 million shares of Selfridge
Shares outstanding = 5 + 1.2 = 6.2 million
Stock price = £ 195 million ÷ 6.2 million = £ 31.45
b) alpha × 195 = 51
alpha = £51 million ÷ £195 million
= 26.15%
(195 ÷ ( 5 +X ) ) × X = 51
51 (5+X) = 195X
255 + 51X = 195X
144X = 255
X = 1.77 million shares
Exchange ratio would be: 1.77 ÷ 2
= 0.8550
<span>The term money is used to describe anything that is regularly used in economic transactions or exchanges.
</span><span>When money is used to express the value of goods and services, it is functioning as a unit of account.
</span><span>This is the primary function of money, to be used a unit by which value of a thing is accounted and compared.</span>
Joshua is currently consuming the optimal (utility-maximizing) quantities of tuna and ham when the price of tuna suddenly decreases. He will consume a bundle of goods at a new higher indifference curve tangent to the new budget constraint.
A Goods is an object that satisfies a human need and provides benefits to consumers and others who purchase satisfactory products. A distinction is generally made between transferable goods and non-transferable services.
Goods is the tangible item sold to the customer and service is the task performed for the benefit of the recipient. Examples of products include automobiles, appliances, and clothing. Examples of services include legal advice, house cleaning, and consulting his services.
Goods are anything from goods, supplies, raw materials to finished products. Anything that is movable and sold to a specific buyer.
Learn more about goods here:brainly.com/question/24373500
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