Everything else equal an asset value is directly related

Assignment Help Financial Management

Reference no: EM131546489

Everything else equal, an asset's value is directly related to

- the cash flow the asset is expected to generate.

- the risk associated with the investment in that asset.

- the rate of return that the firm must earn to satisfy investors' demands.

- the cost of raising additional capital.

Which of the following is true of the change in the weighted average cost of capital of a firm?

-A decrease in the weighted average cost of the capital increases the value of the firm.

-Any change in the weighted average cost of capital results in no change in the value of the firm.

-A decrease in the weighted average cost of the capital increases the cash flow generated by the investments.

-A decrease in the weighted average cost of the capital decreases the value of the firm.

Which of the following is the only risk that is relevant to a rational, diversified investor?

-Unsystematic risk

-Market risk

-Diversifiable risk

Risk is indicated by variability, whether the variability is considered positive or negative. Both the positive and negative outcomes must be evaluated when considering risk.

-true

-false

The market for a stock is said to be in equilibrium when the _____.

-expected return on the stock is equal to its historical return

-expected return on the stock is equal to the market risk premium

-expected return on the stock is equal to its required return

Reference no: EM131546489

Questions Cloud

Describe how they target through use of place and product : Brands carve out niches in the marketplace by targeting a specific audience. And two of the most powerful tools a marketer has for making their target feel.

Animals deal with metabolism and reproduction : In detail, which are the primary differences between how plants and animals deal with metabolism and reproduction?

How much of a role can government play in new technology : How much of a role can/should the government play in new technology, and ethically, what are the rights of people to privacy when choosing new technology?

Explore normative and analytical philosophies of morality : Explore the normative and analytical philosophies of morality and criminal justice in Duff's Theories of Criminal Law (2012).

Everything else equal an asset value is directly related : Everything else equal, an asset's value is directly related to. Which of the following is the only risk that is relevant to a rational, diversified investor?

What is percentage price change of these bonds : what is the percentage price change of these bonds?

Identify all of the stakeholders related to the position : Identify all of the stakeholders related to the position. Evaluate the pros and cons of two ethical theories applicable to the work scenarios you chose.

Corporation ability to build large pools of capital : Which of the following contribute to a corporation's ability to build large pools of capital?

Normal range to avoid the formation of neoplasms : Explain how the cell reproduction rate and differentiation are kept within the normal range to avoid the formation of neoplasms.

User Account

All Pages