A firm finances its activities with both debt (that costs 8%) and equity (that costs 14%). The firm can borrow additional funds at 8% if it so desires. A financial analyst at this firm argues that the firm should undertake any investment that earns a return of at least 8% because such investments will enable the firm to pay debtholders what they desire, and any earnings above 8% will go to stockholders. If a firm decides to make investments based on this logic it will ________.
A) decline to make investments that it should undertake
B) undertake investments that it should decline
C) make only those investment decisions that increase shareholder value
D) have exorbitant interest expenses
B) undertake investments that it should decline
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Team selling is ideally suited to organizations that sell complex and/or customized products and services
Indicate whether the statement is true or false
Online surveys are limited to true-false and multiple choice questions
Indicate whether the statement is true or false
Andrew's net income was $280,000; its total assets were $1,050,000; and its net sales were $3,500,000. Calculate the company's profit margin ratio.
What will be an ideal response?
During a recent board meeting of GHJ, Inc., the directors had a heated argument about adopting a decision support system to assist with filtering out irrelevant information from relevant information. Jack argued that the system would be too expensive and their current income level could not justify the expense. Jorge argued that the system would free up time wasted on sorting spam, junk mail, and irrelevant mail such as bank notices from statements and therefore improve profits. Carol argued that the current email system already did these things and if bank notices were not wanted, that could be addressed at the bank's site and did not require investing in additional software. Henry said the system could do these things and more: it could be used to run "what if" scenarios. He said it
could compile relevant data on competitors pricing or the costs of proposed projects and use data collected on targeted subjects to vary the "what if" scenarios with other variables. Which of the following was not a benefit of using the decision support system discussed by the board of directors? A. Reduce risk B. Improve profits C. Simplify decision making D. Use information effectively