The cost of capital acts as a major link between a firm's long-term investment decisions and the wealth of the firm's owners as determined by the market value of their shares

Sensenig Propeller manufactures replica antique wooden airplane propellers. In the process of production, the company generates a great deal of scrap hardwood. How can using by-product pricing benefit the company?

What will be an ideal response?

You have been asked to analyze two stocks, Stock A and Stock B. The beta of stock A is 1.2, and the beta of stock B is 0.8. The expected return on stock A is 13.5%, the expected return on stock B is 11.0% and the risk-free rate is 7%

We also know that stock A is fairly priced. Which of the following regarding Stock B must be true? A) The expected return on stock A is too high. B) Stock B is also fairly priced. C) The price of stock B is too high. D) The expected return on stock B is too high.