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NEW QUESTION: 1

A. Option D
B. Option C
C. Option A
D. Option B
Answer: C,D

NEW QUESTION: 2
Steadybeta currently operates 3 projects, resulting in a beta of 1.27. It is considering a risky expansion project whose cash flow analysis indicates a beta of 2.3. The project requires a capital commitment of $4.8 million and has an NPV of $2 million. The current risk-free rate is 5.6% and the market risk premium is
8.9%. Steadybeta's current market capitalization is $17.2 million. If Steadybeta undertook the project, the required rate of return expected by its shareholders will be:
A. 19.5%
B. 16.2%
C. 14.8%
D. 13.9%
Answer: A
Explanation:
Explanation/Reference:
Explanation:
19.5% The firm can be considered a portfolio of 4 projects. The beta of a portfolio equals the weighted average of the betas of the individual components. The weight of a component equals the fraction of the market value it comprises. Since the project has an NPV of $2 million, its market value equals $6.8 million and the market value after the project is undertaken will be $(17.2+6.8) = $24 million. Therefore, the beta of the firm after it undertakes the project equals 17.2/24*1.27 + 6.8/24*2.3 = 1.56. The required rate of return then equals 5.6% + 1.56*8.9% = 19.5%.

NEW QUESTION: 3
What is the primary function of a DTE terminal?
A. Interfacing to a host computer
B. Implementing application software
C. Transmitting application software
D. Storing information
Answer: D

NEW QUESTION: 4
Which statement correctly describes the default state of a high-end SRX Series Services
Gateway?
A. It selectively restricts traffic based on default security policies.
B. It forwards no traffic.
C. It selectively forwards traffic based on default security policies.
D. It forwards all traffic.
Answer: B