Current debt-equity ratio-risk level of project

Assignment Help Financial Management

Reference no: EM13726427

Kelly's uses the firm's WACC as the required return for some of its projects. For other projects, the firms uses a rate equal to WACC plus 1 percent, while another set of projects is assigned rates equal to WACC minus some amount. Which one of the following factors should be the key factor the firm uses to determine the amount of the adjustment it will make when assigning the project a discount rate?

A. Firm beta

B. Date for project commencement

C. Risk level of project

D. Division within the firm that will be assigned to manage the project

E. Current debt-equity ratio

Reference no: EM13726427

Questions Cloud

The weighted average cost of capital for a risky : All else constant, the weighted average cost of capital for a risky, levered firm will decrease if:

Detail study on social media : The length of your report should reflect the complexity of the topic and the thoroughness of the research. The report should be self-contained (explain any terminology particular to the topic the first time you use it), consistent, and to the poin..

Make a timeline of events in history of american education : you are required to make a timeline of the events in the history of American education that made a significant impact, and include a summary of each event.

Major organizational factors contribute to job satisfaction : Analyze the manner in which job satisfaction impacts both individual performance and an organization's ability to meet its objectives. Give at least two (2) examples of the major organizational factors that contribute to job satisfaction.

Current debt-equity ratio-risk level of project : Kelly's uses the firm's WACC as the required return for some of its projects. For other projects, the firms uses a rate equal to WACC plus 1 percent, while another set of projects is assigned rates equal to WACC minus some amount. Which one of the fo..

Why does this problem exist or what causes it : Your company, Rasmussen Consulting, was hired by MovieFlix, a company that provides subscription service for on-demand Internet streaming media and DVD-by-mail within the U.S. Why does this problem exist or what causes it

Prepare an argument explaining the major reasons : Become an advocate for either the consumer or the industry. Prepare an argument explaining the major reasons why you support either the consumer or the industry.

Illustrates the concept of cyclical unemployment : The economy is at full-employment and spending increases, which spurs inflation - Which of these groups would be helped by inflation

Why it is utilized despite its complexity : Database connectivity is a very complex issue. Address what makes it so complex and what could be done to simplify it. Include in your discussion why it is utilized despite its complexity. Personalize your answer and give examples

User Account

All Pages