What happens in a multi-divisional company decides to use a companywide WACC to judge projects? Is there
Fantastic news! We've Found the answer you've been seeking!
Question:
What happens in a multi-divisional company decides to use a companywide WACC to judge projects? Is there a remedy for this?
What happens if a company decides to use a companywide WACC to judge ALL of its projects, even if the projects are not related to the core business? Is there a remedy for this?
Expert Answer:
Answer rating: 100% (QA)
When a multidivisional company decides to use a companywide Weighted Average Cost of Capital WACC to evaluate all of its projects including those that are not related to the core business it can lead ... View the full answer
Posted Date:
Students also viewed these finance questions
-
The following income statement, statement of cash flows, and additional information are available for PEK Company: Additional information: a. Beginning inventory and purchases for the one product the...
-
The following article by Lucy Kellaway (2001) is light-hearted and witty, but it also raises several interesting questions about relative pay levels and how we should determine them. Pandoras pay...
-
Ann Carter, Chief Financial Officer of Consolidated Electric Company (Con El), must make a recommendation to Con Els board of directors regarding the firms dividend policy. Con El owns two...
-
Design for Quality (D4Q) is a consulting firm that specializes in the design and implementation of quality management programs for service companies and organizations. It has had success designing...
-
Exhibit 16 A. 4 presents a decision tree for impairments of investing assets under IFRS. Please detail the decisions and judgments that you must make when determining whether an investing asset has...
-
David and Darlene Jasper have one child, Sam, who is 6 years old. The Jaspers reside at 4639 Honeysuckle Lane, Los Angeles, CA 90248. David's Social Security number is 577-11-3311, Darlene's is...
-
Incremental change is ____________. (a) more dramatic than radical change (b) less dramatic than radical change (c) infrequently encountered (d) usually very expensive
-
Research some ads for IT professionals in a company and/or geographic location that you would like to work in. Which types of jobs would you be the most interested in, and why?
-
Is the function represented by the following table linear or quadratic? Choose the correct answer with the correct explanation. X 0 f(x) 10 1 2 23 3 4 5 424 10 20 Quadratic, because the 1st...
-
On January 1, 20X1, Woodruff Company had 600,000 shares of common stock outstanding. On September 1, 20X1, an additional 400,000 shares of common stock were issued. In addition, Woodruff had...
-
How did prejudicial attitudes (cultural, moral, religious, political, etc.) develop in our society? What from your reading discusses this phenomenon? How does it impact the field of human services?...
-
Payroll Tax Entries According to a summary of the payroll of Mountain Streaming Co., $582,000 was subject to the 6.0% social security tax and the 1.5% Medicare tax. Also, $19,000 was subject to state...
-
The federal corporate income tax rate is 35 percent and firms may carry-back losses for two years and carry-forward losses for 20 years. The carry-back must occur before carry-forward. A corporation...
-
the standard for direct labor for product b is two hours at $ 2 0 per hour. if a firm produces 2 0 0 units of product b and uses 4 1 0 hours at $ 1 8 per hour. What is the direct labor efficiency...
-
Take a moment to think about your values around money. Then, look at the top three to four categories where you are spending most of your beans. How do these choices reflect your values around money?
-
The following tabulations are actual demand of units for six months and a starting forecast in January. ACTUAL FORECAST January February 100 80 94 March 106 April 80 May 68 June 94 a. Calculate...
-
Why did management adopt the new plan even though it provides a smaller expected number of exposures than the original plan recommended by the original linear programming model?
-
Define: convertible bond, bond with equity warrants, preference share, investment certificate and bond redeemable in shares.
-
The bond market yield is 7%. A company issues a bond with equity warrants at a gross yield to maturity of 3% assuming the warrants are not exercised. What is the cost of this product? What is the...
-
Is a convertible bond more costly to the issuing company than a bond with equity warrants?
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App