The APV method to value a project should be used when
A project's level of debt is known over the life of the project
The beta of debt is commonly assumed to be
zero
To calculate the adjusted present value, you should
Add the additional effects of debt to the all-equity project value
The APV method is least useful in which of these situations
Project based on a target debt-to-value ratio
Which method discounts levered cash flows?
FTE (Flow to Equity)
Given the all-equity cost of capital, the cost of levered equity can be computed as
Rs= R0 + (B/S)(1-T)(R0-Rb)
The date before which a new purchaser of stock is entitled to receive a declared dividend, but on or after which she does not receive the dividend, is called the _____ date.
ex-dividend
The ability of shareholders to undo the dividend policy of the firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is called
Homemade dividends
What is an argument in favor or a low dividend policy?
The tax on capital gains is deferred until the gain is realized
Nu Tech, Inc. is a technology firm with good growth prospects. The firm wishes to do something to acknowledge the loyalty of its shareholders but needs all of its available cash to fund its rapid growth. The market price of its stock is currently trading
A stock dividend
A stock split
Does not affect the total value of any of the equity accounts