The weighted average cost of capital of a firm represents the: a. minimum dividend yield a firm must pay to its preferred stockholders. b. maximum interest rate a firm should pay on the debt it uses. c. maximum rate of return a firm can expect to earn on its investments. d. minimum rate of return a firm must earn on average-risk investments to maintain its current value. e. required rate of return that should be used to evaluate capital budgeting projects that have above-average risk.

Uestion 7 you hold a portfolio consisting of a $5,000 investment in each of 20 different stocks. the portfolio beta is equal to 1.12. you have decided to sell a coal mining stock (b = 1.00) at $5,000 net and use the proceeds to buy a like amount of a mineral rights company stock (b = 2.00). what is the new beta of the portfolio?

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)

Why is efficiency an important economic goal?