Decisions are made when the state of nature is known under which of the following scenarios?
a. decisions under certainty
b. decisions under uncertainty
c. decisions under state of nature
d. decisions under risk
a. decisions under certainty
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Marketing-mix modeling is used to estimate causal relationships and measure how marketing activity affects outcomes
Indicate whether the statement is true or false
Financial liabilities include all of the following except
a. mortgages payable b. current maturities of long term debt c. accrued taxes d. bonds payable
Fawlty Brake Systems Inc is all equity financed and generates perpetual annual EBIT of $600. Assume that the EBIT, and all other cash flows, occur at year end and that we are currently at the beginning of a year
Assume that Fawlty has a 100% payout rate, 1,000 shares outstanding, and that shareholders require a return of 6%. Assume that the tax rate is 0%. Fawlty is considering an open market stock repurchase. It plans to buy 20% of its outstanding shares at the price of $10.00 per share. The repurchased shares will be cancelled. It will finance the repurchase by issuing perpetual bonds worth a total sum of $2,000 and a coupon rate (and yield) of 4%. Assume that the tax rate is 0%. If Fawlty goes ahead with the repurchase, then what is its WACC after the repurchase is complete? A) 4.0% B) 4.5% C) 5.0% D) 5.5% E) 6.0%
One of the major challenges of one-to-one advertising is ________, or the flooding of users with junk e-mail, banners, and pop-ups
A) interstitial B) permission marketing C) spamming D) behavioral targeting