Which of the following methods involves calculating an average of the beta coefficients of numerous firms that are in the same (or a quite similar) line of business and then using that average beta coefficient to determine the appropriate required rate of return for a new capital budgeting project?

A. Sensitivity analysis method
B. Pure play method
C. Accounting beta method
D. Risk-adjusted method
E. Net present value (NPV) method


Answer: B

Business

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Museum Corporation acquired a new manufacturing building by issuing 10,000 shares of its $50 par value preferred stock with a $75 per share market price. Similar buildings have recently cost $780,000 . What are the effects of this transaction on the accounting equation for Museum?

a. Building and Preferred Stock increase $780,000. b. Building and Preferred Stock increase $500,000. c. Building increases $780,000? Preferred Stock increases $500,000? Additional Paid­in Capital—Preferred increases $280,000. d. Building increases $750,000? Preferred Stock increases $500,000? Additional Paid­in Capital—Preferred increases $250,000.

Business

In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records

Indicate whether the statement is true or false

Business

1) Louise is a single parent with four children under age ten. A good way for her to avoid role conflict would be take a position that requires heavy travel

Indicate whether the statement is true or false.

Business

An expedited cost is one that does not vary with respect to their usage

Indicate whether the statement is true or false

Business