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Why is the marginal cost of capital the relevant concept of evaluating investment projects, rather than a corporation's actual, historic cost of capital?
Basic Finance, Finance
1. Interest Rate Risk. Both Bond Bill and Bond Ted have 7 percent coupons, make semiannual payments, and are priced at par value. Bond Bill has 3 years to maturity, whereas Bond Ted has 20 years to maturity. If interest ...
There are three well-diversified portfolios A, B and C with alphas of 0.0132, 0.0289 and 0.0579, respectively, and betas of 1.27, 1.15 and 1.50, respectively. The risk-free rate is 4.7% p.a., the market risk premium is 8 ...
A small price-taking nation imports a good that it could not possibly produce itself at any finite price. Can you describe plausible conditions under which that nation would benefit from an import tariff on the good?
Answer the questions using Excel Consider a person with the following utility function over wealth: u(w) = ew, where e is the exponential function (approximately equal to 2.7183) and w = wealth in hundreds of thousands o ...
Globalization has failed in every respect. Brexit is a clear sign that the integration of financial markets will now be unwound. What is your view of this statement? Justify your opinion.
The past five monthly returns for PG&E are -3.55 percent, 4.83 percent, 4.15 percent, 7.04 percent, and 3.96 percent. Compute the standard deviation of PG&E's monthly returns. (Do not round intermediate calculations and ...
Do the following problems 1. Calculate the following cross exchange rates: a. If the exchange rates are 200 yen per dollar and 50 US cents per Swiss Franc, what is the exchange rate of yen per franc? b. The dollar is tra ...
Suppose a company announces a bid to acquire a smaller rival on a day that macroeconomic news indicated that inflation was picking up. On the day of both announcements, the firm's return was -0.55% while the market retur ...
Wholesale Hank's Hardware had beginning retained earnings of $18,670. During the year, the company paid dividends of $2,050, and reported total sales of $203,846. Their tax rate is 35 percent. For the year, costs were $8 ...
Discuss the statement: "Since I have high credit card limits, I have lots of money." Are credit cards money? Why or why not?
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