Which of the segmentation attractiveness criteria is addressed when Magnolia Café asks the question, "Are there enough employees in the government center to justify targeting the center for lunch delivery service?"
What will be an ideal response?
This addresses the question of whether the segment is substantial.
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A government agency charges motorists a toll for using a bridge. The toll is dropped when the cost of the bridge is paid. In other words, the government's target return figure was
A. 100 percent. B. 20 percent. C. 10 percent. D. one. E. zero.
The average cost associated with each additional dollar of financing for investment projects is
A) the incremental return. B) the marginal cost of capital. C) the component cost of capital. D) CAPM required return.
Derek's Dinghies and Rafts (DDR) is the world's largest manufacturer of rowboats and rafts. At the end of the current year, analysts expect DDR's EBIT to be $2M and they expect the same earnings annually in perpetuity
DDR's shareholders require a return of 12.5% and there are 5M common shares outstanding. DDR has debt with a total face value of $5M. The bonds have an annual coupon of 3%, are rated AAA and yield 3%. The CFO of DDR believes that the company is under-levered. To increase the leverage, the CFO proposes to repurchase 1.2M shares at a price of $1.25 per share. The repurchase will be financed by additional borrowing. The corporate tax rate is 40%. What is the value of the company prior to the repurchase, and what is the stock price after the repurchase? A) Value (prior) = $9.6M; Stock price (after) = $1.50 B) Value (prior) = $9.6M; Stock price (after) = $1.14 C) Value (prior) = $11.6M; Stock price (after) = $1.50 D) Value (prior) = $11.6M; Stock price (after) = $1.14 E) Value (prior) = $11.6M; Stock price (after) = $3.21
ABC Bank sent Joanne, a depositor, her January statement on January 31. Within what length of time after this date will Joanne have to examine the statement and enclosed items and notify ABC bank of any errors?
A) 10 days B) 30 days C) 60 days D) 1 year