Schalheim Sisters Inc. has always paid out all of its earnings as dividends, hence the firm has no retained earnings. This same situation is expected to persist in the future. The company uses the CAPM to calculate its cost of equity, its target capital structure consists of common stock, preferred stock, and debt. Which of the following events would REDUCE its WACC.
a. The market risk premium declines.
b. The flotation costs associated with issuing new common stock increase.
c. The company?s beta increases.
d. Expected inflation increases.
e. The flotation costs associated with issuing preferred stock increase.
Answers: 1
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Business, 23.06.2019 06:10
The a/p clerk of a company writes the checks for vendors, and the controller signs the checks. the a/p clerk hasdevised a plan to give herself a raise. she creates a new vendor for her friend's business and creates two purchaseorders for random car detailing services for $75 and $70. she writes the checks to pay these new vendors knowing thecontroller will only pay close attention to checks over $100. she delivers the checks to her friend to deposit in his bankaccount, and then he writes her a personal check for the full amount of $145.ceventually, what will be the effect of her actions? what can the company do to prevent this type of behavior? due mondav
Answers: 1
Schalheim Sisters Inc. has always paid out all of its earnings as dividends, hence the firm has no r...
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