Question 18 A firm with a cost of capital of 13 per cent is evaluating three...

 

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Question 18 A firm with a cost of capital of 13 per cent is evaluating three capital projects. The internal rates of return are as follows: Project 1 2 3 IRR 12% 15% 13% The firm should_ O accept Project 3 and reject Projects 1 and 2. O accept Projects 2 and 3 and reject Project 1. O accept Project 2 and reject Projects 1 and 3. O accept Project 1 and reject Projects 2 and 3. Question 20 1 points Save Answer You have just purchased a government bond for $1,100 that promises to pay $100 p.a. over the next five years. The market price of the bond has just decreased to $980. A likely reason for this is: O interest rates, in general, have decreased. O interest rates, in general, have increased. the face value of the bond has been decreased. the bond is perceived by the market to be less risky now than before. 1 points Tellite Ltd, a telecommunication company, did not pay a dividend in the last financial year. However, the company has indicated that it expects to earn $1 per share in this financial year and to pay out 20% of these earnings in dividends. Financial analysts expect that Tellite's earnings per share and dividend per share will grow at a rate of 10% a year. The rate of return required by investors has been estimated at 12% per annum. Estimate the present value of the share. $10 Question 21 $50 $11 $5.50 Save Answer Question 18 A firm with a cost of capital of 13 per cent is evaluating three capital projects. The internal rates of return are as follows: Project 1 2 3 IRR 12% 15% 13% The firm should_ O accept Project 3 and reject Projects 1 and 2. O accept Projects 2 and 3 and reject Project 1. O accept Project 2 and reject Projects 1 and 3. O accept Project 1 and reject Projects 2 and 3. Question 20 1 points Save Answer You have just purchased a government bond for $1,100 that promises to pay $100 p.a. over the next five years. The market price of the bond has just decreased to $980. A likely reason for this is: O interest rates, in general, have decreased. O interest rates, in general, have increased. the face value of the bond has been decreased. the bond is perceived by the market to be less risky now than before. 1 points Tellite Ltd, a telecommunication company, did not pay a dividend in the last financial year. However, the company has indicated that it expects to earn $1 per share in this financial year and to pay out 20% of these earnings in dividends. Financial analysts expect that Tellite's earnings per share and dividend per share will grow at a rate of 10% a year. The rate of return required by investors has been estimated at 12% per annum. Estimate the present value of the share. $10 Question 21 $50 $11 $5.50 Save Answer

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Question 18 Given that the firms cost of capital is 13 the firm should accept projects with an inter... View the full answer