Which of the following causes a firm's cost of capital (WACC) to differ from an investor's required
rate of return on the company's common stock?
A) the fact that the risk-free rate of interest has increased
B) The market risk premium exceeds 12%.
C) the incurrence of flotation costs when new securities are issued
D) None of the above N the WACC and required return are the same.
C
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What is the main purpose of appellate review?
a. Review the case to see if the appellate judges agree with the outcome at the trial court b. Review what happened at the trial court to make sure that the trial was fair c. Issue warrants d. Hear testimony from witnesses
MBA Inc. will pay a dividend for the first time at the end of 2016. It projects the following dividend per share: 2016 $1.50 2017 $2.00 2018 $2.50
Beginning with 2016 dividends will grow at 4% per year. The required rate of return is 12%. The intrinsic value of MBA shares is A) $25.37. B) $27.85. C) $28.96. D) $38.50.