The cost of capital is affected by many factors

Assignment Help Financial Accounting
Reference no: EM133272704

1. GenCorp. uses only equity capital, has two divisions of equal size, and has no debt or preferred shares. The corporate (composite) WACC is 12.0%, Division One's cost of capital is 10.0%, and Division Two's cost is 14.0%. Which of the following projects shoule GenCorp. select?

a) Division Two project with an 11% return.

b) Division Two project with a 12% return.

c) Division One project with an 11% return.

d) Division One project with a 9% return.

e) Division Two project with a 13% return.

2. The cost of capital is affected by many factors. Which of the following factors can a firm control?

a) Interest cost

b) Credit crises

c) Market risk premium

d) Tax rates

e) Dividend policy

Reference no: EM133272704

Questions Cloud

General overhead activities : On March 21, 2021, Christine worked 5.5 hours on Job A-1, and 3 hours on general "overhead activities." Christine is paid $17 per hour.
Role of investments on corporation balance sheet : Role of investments on a corporation balance sheet. What considerations would you have in your business as you consider short-term and long-term investments?
Present value factor for ordinary annuity : The present value factor for an ordinary annuity at 10% for 3 periods is 2.48685, and the present value of $1 at 10% for 3 periods is 0.7513.
Planning for retirement : You are planning for retirement and have calculated that you want to have saved $1,272,000 by the time you retire in 25 years.
The cost of capital is affected by many factors : The cost of capital is affected by many factors. Which of the following factors can a firm control?
Friend calls you with great investment opportunity : A friend calls you with great investment opportunity, that will produce following set of cash flows. what is most you should be willing to pay for investment?
Calculate the taxable value of the motor vehicle : A company files its FBT returns on a quarterly basis. Calculate the taxable value of the motor vehicle for the quarter ended 31 December 2017.
Total invested funds are measured : Total invested funds are measured as: A. Debt + debt equivalents + equity + equity equivalents. B. Debt + debt equivalents - equity + equity equivalents.
Calculating revenue or expenses for organization : Prepare the explanation you would give Sidney. calculating revenue or expenses for an organization that follows IFRS.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Define what is systematic risk and unsystematic risk

Define systematic risk and unsystematic risk. At a meeting with her investment advisor she requests explanations of systematic risk and unsystematic risk.

  How much is the in account at the end of month

Mary deposits, If the account pays 2.9% per annum, compounded quarterly, how much is the? in her account at the end of the 27? month?

  Explain how should mary treat the cost of cleanup

Defend the historical cost principle. Use the conceptual frame work concepts and definitions in your defense. Explain how should Mary, treat the cost of cleanup? Is it a land cost, a building cost, or an expense? Explain.

  Calculate the days in inventory

Suppose this information is available for PepsiCo, Inc. for 2020, 2021, and 2022. Calculate the days in inventory for 2020, 2021, and 2022

  Why is representation letter important confirmation audit

Why is the representation letter important confirmation audit evidence for the external auditors to use in their final evaluation of the audit?

  Prepare the journal entry that faulkner will record

Suppose instead that Faulkner previously used straight-line depreciation and changed to sum-of-the-years'- digits in 2021. Prepare the journal entry

  Find how many months will take to repay the debt

Find how many months will it take to repay the debt if the annual interest rate on the credit card is 19.8%? A landscape architect accrued $7,827.51 in credit.

  How much should a and c receive upon liquidation

A, B, and C share net income and losses in a 5:3:2 ratio respectively. How much should A and C receive upon liquidation of the partnership?

  Estimate the free cash flow to firm for each of four years

Estimate the free cash flow to the firm for each of the four years. The project required an initial investment of $15,000 and an additional investment of $2,000

  Which investor was a better selector of individual stocks

If the T-bill rate was 8% and the market return during the period was 12%, which investor would be considered the superior stock selector?

  Prepare the consolidated balance sheet of Zeus Group

AF5141 Corporate Financial Accounting Assignment. Instructions: You are required to prepare the consolidated balance sheet of Zeus Group as at 31 December 2017

  How much gain or loss will she report for two transactions

She sold the Thunderbird for $85,000 and the Honda for $25,000. How much gain or loss will she report for these two transactions

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd