Which of the following statements concerning the compressed adjusted present value (APV) model is NOT CORRECT? A) For a given D/S, the WACC in the compressed APV model is greater than the WACC under MM's original (with tax) assumptions.
B) The value of a growing tax shield is greater than the value of a constant tax shield.
C) The total value of the firm is independent of the amount of debt it uses.
D) The tax shields should be discounted at the unlevered cost of equity.
E) For a given D/S, the levered cost of equity in the compressed APV model is greater than the levered cost of equity under MM's original (with tax) assumptions.

Find the expected net profit of an insurance company on a health-insurance policy if: the probability of a $5000 claim is 20%; the probability of a $1000 claim is 60%; the probability of a $20,000 claim is 10%, and the probability of no claim is 10%. the company charges $4000 for this coverage. interpret your answer.

Atrough in the business cycle occurs when

Rate of return douglas keel, a financial analyst for orange industries, wishes to estimate the rate of return for two similar-risk investments, x and y. douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 000, respectively. a. calculate the expected rate of return on investments x and y using the most recent year's data. b. assuming that the two investments are equally risky, which one should douglas recommend? why?