Question: Below are five comparable companies that compete in the Widget industry: Company V, Company W, Company X, Company Y, and Company Z. Assume the greater

Below are five comparable companies that compete in the Widget industry: Company V, Company W, Company X, Company Y, and Company Z. Assume

Below are five comparable companies that compete in the Widget industry: Company V, Company W, Company X, Company Y, and Company Z. Assume the greater the assets on the balance sheet, the larger the company. Use the financial statement information in the table below to help answer questions 14-17. Company V Company W Company X Company Y Company Z Debt/Equity 0.5385 3.0000 0 .5625 0.4925 4.0000 YTM 8.0% 9.0% 6.0% 6.0% 11.0% Total Assets 100 1060 10001 9701 100 Tax Rate 30.0% 35.0% 35.0% 3 0.0% 30.0% Net Income 26 53 120 194 7 Beta Book Value Dividends 1 .25 65 3 1.35 265 15 1.101 640 40 1.15 650 64 1.40 200 Re 14.3% 15.2% 12.9% 13.4% 15.6% 16. The company with the lowest weighted average cost of capital is: A. Company V B. Company W C. Company X D. Company Y E. Company Z 17. Based on the betas for all companies, the Widget industry is more likely non-cyclical than cyclical. Evaluate the underlined words in italics. True or False? A. True B. False

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