The NPV method assumes that cash inflows are reinvested at the:
A) internal rate of return.
B) firm's cost of capital.
C) average yield on corporate bonds.
D) average yield from an equity index fund.
E) risk-adjusted hurdle rate.
B
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A frequency distribution that depends on two sets of degrees of freedom is called a(n) ________
A) p distribution B) t distribution C) F distribution D) z distribution E) chi-square distribution
The residual dividend theory suggests that dividends will only be paid
A) if the corporation has more positive NPV projects than it can fund. B) if the tax rate on capital gains is higher than the tax rate on dividends. C) if interest rates available to shareholders are higher than the required return on the company's stock. D) if current retained earnings exceed the equity portion of the firm's capital budget.