Answer:
a. the rapid development of the Internet's capabilities.
Explanation:
It is increasingly difficult for a firm to develop and sustain a competitive advantage because of the effects of globalization and the rapid development of the Internet's capabilities.
Globalization can be defined as the process of developing technology, people, investments, informations, products in order to create international influences across cultures and national markets or borders. This makes it possible for various multinational enterprise or companies to break into different markets across world and compete effectively with other companies.
Also, the rapid development of the Internet's capabilities gives various companies the ability and privilege to technology and software applications to seamlessly meet the needs of customers over the web such as cloud computing services, Internet of things (IoT) etc.
Answer:
11.41%
Explanation:
Unlevered beta for new division:
= Levered beta ÷ [1 + (1 - tax) × D/E]
= 1.6 ÷ [1 + (1 - 40%) × (40 ÷ 60)
]
= 1.14
Beta for Faris's new division:
= Unlevered beta × [(1 + (1 - tax) × D/E]
= 1.14 × [1 + (1 - 40%) × (70 ÷ 30)]
= 2.74
Using CAPM,
Cost of equity, re = Rf + (beta × MRP)
= 8% + (2.74 × 5%)
= 21.71%
WACC:
= (wd × rd) + (we × re
)
= (70% × 7%) + (30% × 21.71%
)
= 11.41%
Answer: The options are given below:
A. Short term.
B. Operating.
C. Long
D. Finance.
The correct option is D. Finance.
Explanation: A finance lease is the kind of lease in which a finance company is the legal owner of the asset throughout the duration of the lease, while the lessee has both operating control over the asset, and some share of the economic risks and returns from the change in the valuation of the underlying asset.
In a finance lease agreement, ownership of the property is transferred to the lessee at the end of the lease term.
Answer:
The correct answer is letter "A": Shareholders who are risk averse may prefer some dividends over the promise of future capital gains.
Explanation:
A dividend is a cash distribution by a company to its shareholders out of the profits of a period. Capital Gain refers to the increase in the value of a capital asset or an investment upon sale. From the two of them, dividends are safer investments since they do not rely exclusively on the sales of an asset.
Thus, a conservative investor is likely to choose dividends over the promise of capital gains.
