If XYZ has a WACC of 12%, should it accept the following project? The project cost $500 now (t=0) and will produce $100 at the end of year 1, $200 at the end of year 2, and $300 at the end of year 3.

Prof. Smith wants to study the characteristics of shoplifting. She gets permission from a grocery store owner to follow randomly-selected subjects through the store using hidden video cameras. She then takes note of such things as the length of time they are in the store, their socio-demographic characteristics (e.g., sex, race, approximate age), whether they are alone or in a group, etc. She also takes note of whether they try to conceal any items and exit the store without paying. What ethical principle is she potentially violating in this study?

Harm to participants can include all but which of the following?

Quinlan Enterprises stock trades for $52.50 per share. It is expected to pay a $2.50 dividend at year end (D1 = $2.50), and the dividend is expected to grow at a constant rate of 5.50% a year. The before-tax cost of debt is 8.50%, and the tax rate is 40%. The target capital structure consists of 40% debt and 60% common equity. What is the company’s WACC if all the equity used is from retained earnings (so the firm does not have to issue new shares of common stock)?

Which of the following is the correct order of the sections of an empirical journal article?

A 15-year bond has an annual coupon rate of 8%.  The coupon rate will remain fixed until the bond matures.  The current market rates for the bond is 6%.  Which of the following statements is CORRECT?

To estimate the company’s WACC, Ditto Inc. recently hired you as a consultant.  You have obtained the following information.  (1) The firm’s bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,000.00. (2) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock’s beta is 1.0.  (3) The company’s tax rate is 40%.  (4) The target capital structure consists of 35% debt and the 65% common equity.  The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares.  What is its WACC?

Ellman Systems is considering a project that has the following cash flow and WACC data.                What is the project’s NPV?   WACC:  8.00% Year                                   0                    1                    2                    3      Cash flows                   -$1,000           $500              $500              $500

Philip Zimbardo’s simulated prison study was carried out to its full anticipated duration.

Curtis Corporation’s noncallable bonds currently sell for $1,065. They have a 15-year maturity, an annual coupon of $95, and a par value of $1,000. What is their yield to maturity (YTM)?