Makes bad managerial decisions with negative consequences

Assignment Help Financial Management

Reference no: EM131445365

TRUE OR FALSE? WHY?

When a firm makes bad managerial decisions with negative consequences, such events are unpredictable and therefore cannot be diversified away by the investor.

Reference no: EM131445365

Questions Cloud

What is the profit to the investment bank : An investment bank pays $ 20.50 per share for 3 million shares of X. It then sells these shares to the public for $ 22.50 per share. How much money does X receive ? What is the profit to the investment bank ? What is the stock price of X ?

Nondiversifiable risk-which is measured by beta : Nondiversifiable risk, which is measured by beta, can be lowered by adding a greater variety of stocks to a portfolio. Diversifiable risk can be lowered by adding a greater variety of stocks to a portfolio.

Calculate the firms aftertax cash outflows : Suppose your company needs to raise $36.9 million and you want to issue 24-year bonds for this purpose. Assume the required return on your bond issue will be 9.4 percent, and you're evaluating two issue alternatives.

The risks to dwight of not revising the income statement : Far from being an exact science, accounting involves estimation and judgment. Consider the case of Dwight Nelson, chief financial officer of Pilot Enterprises. Pilot is a relatively young, privately held company with thoughts of going public in the n..

Makes bad managerial decisions with negative consequences : When a firm makes bad managerial decisions with negative consequences, such events are unpredictable and therefore cannot be diversified away by the investor.

Standard deviation of the rate of return on this investment : Suppose you have a project that has a 0.4 chance of doubling your investment in a year and a 0.6 chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

How much should each deposit be : You need to accumulate $90457 for your children?'s education. You have decided to place equal year-end deposits in a savings account for the next 11 years. The savings account pays 4.57 percent per year, compounded annually. How much should each d..

What is capm : Assumptions in CAPM and cost of failure You are the managing partner at a venture capital firm, and you feel that to solidify your status as a full-service institution, you must bolster your in-house valuation division.

Using the bank loan to pay off the credit card debt : The bank loan charges 5% APR, compounded monthly. If your savings account earns 4% APR compounded monthly, how much do you save in present value terms by using the bank loan to pay off the credit card debt?

User Account

All Pages