What are the four key elements to arbitrage trading

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Reference no: EM131990123

1. If employee-investors are unsophisticated and unlikely to be materially influenced by educational efforts, the best way to improve the welfare of employee-investors is pension design. Discuss.

2. What are the four key elements to arbitrage trading?

3. Time Warner shares have market capitalization of $55 billion. The company just paid a dividend of $0.30 per share and each share trades for $45. The growth rate in dividends is expected to be 7% per year. Also, Time Warner has $15 billion of debt that trades with a yield to maturity of 9%. If the firms tax rate is 40%, compute the WACC?

A. 7.22%

B. 8.3%

C. 7.94%

D. 6.86%

Reference no: EM131990123

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