MIRR is usually calculated with the same reinvestment rate as that embedded in the O cost of debt ○ NPV cost of equity IRR regular payback method
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- The required rate of return on equity is the most appropriate discount rate to use when applying a ______ valuation model. A. FCFE B. DDM C. FCEF or DDM D. P/E E. FCEF1. The CAPM model can be used to derive the cost of сapital. A. Equity B. Borrowed C. Total D. UnlimitedExplain the relationship between return on equity (ROE), return on asset (ROA), and leverage effect. Please define these terms before discussion.
- Which of the following correctly orders the investment rules of average accounting return (AR), internal rate of return (IRR), and net present value (NPV) from the most desirable to the least desirable? a. IRR, AR, NPV. b. AR, IRR, NPV. c. NPV, AR, IRR. d. AR, NPV, IRR. e. NPV, IRR, AR.Define each of the following terms: c. Net present value (NPV) method; internal rate of return (IRR) method;profitability index (PI)Please decsribe, explain and give examples to the following terms so I can understand well: Contributed Capital Shapre Premium
- Make a simple example of the following: a. Capital Gain (or Losses) b. Expected Return c. Real Return d. Risk-free Return e. Required Return f. Holding Period ReturnWhich one of the following is most closely related to the net present value profile? A: Payback B: Discounted payback C: Profitability index D: Average accounting return E: Internal rate of returnWhich are valid methods for finding the cost of equity? Check all that apply: 1. The dividend discount model approach 2. The perpetuity approach 3. The YTM approach 4. The CAPM or SML approach
- Generally, the ____ is considered to be a more realistic reinvestment rate than the ____. a. risk-free rate; cost of capital b. risk-free rate; internal rate of return c. cost of capital; internal rate of return d. internal rate of return; cost of capitalThe return on equity will be <List A> and the debt ratio will be <List B> under Arrangement #2, as compared with Arrangement #1. Your answer must be supported with a solutiona) Net Present Value (Present Worth); b) Internal Rate of Return (IRR);c) External Rate of Return (ERR);d) Simple Payback Period