Suppose that you are an analyst working for a venture capital firm. An individual contacts you about backing his brand new Internet company. What information would you want before making this decision?
What will be an ideal response?
You would want information that would allow you to calculate an expected rate of return on your investment. Therefore, you would need information on projected costs and revenues for the firm.
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Why are cartels among firms usually kept secret?
What will be an ideal response?
If a stock's dividend is expected to grow at a constant rate of 4 percent in the future and it has just paid a dividend of $6.00 per share,
and you have an alternative investment of equal risk that will earn a 7 percent rate of return, what would you be willing to pay per share for this stock? A) $6.66 B) $54.55 C) $200.00 D) $208.00
Catherine's demand for fish takes the conventional form of a downward-sloping demand curve. When the price of fish falls, her consumer surplus
a. increases b. decreases c. remains unchanged because the demand curve didn't change d. remains unchanged because the quantity demanded remains unchanged e. decreases only if price elasticity of demand is greater than one
Falling interest rates can
A) increase a firm's stock price, which causes firms to issue more stock shares, and thus increases funds for investment. B) raise the cost of borrowing for firms and decrease investment. C) raise the cost of buying new homes and fewer new homes will be purchased. D) lower the cost of buying new homes and fewer new homes will be purchased.