Which of the following statements is correct? a. the return on common equity (roe) is generally considered less significant, from a stockholder's viewpoint, than the return on total assets (roa). b. the advantage of the basic earning power ratio (bep) over the return on total assets for judging a company's operating efficiency is that the bep does not reflect the effects of debt and taxes. c. suppose you are analyzing two firms in the same industry. firm a has a profit margin of 10% versus a margin of 8% for firm b. firm a's total debt to total capital ratio is 70% versus 20% for firm b. based only on these two facts, you cannot reach a conclusion as to which firm is better managed, because the difference in debt, not better management, could be the cause of firm a's higher profit margin. d. other things held constant, the less debt a firm uses, the lower its return on total assets will be. e. the price/earnings (p/e) ratio tells us how much investors are willing to pay for a dollar of current earnings. in general, investors regard companies with higher p/e ratios as more risky and/or less likely to enjoy higher future growth.

Which of the following is the most important role of marketing in the process selection decision? identifying points of differentiation for mass customization. stimulating demand in developing markets. estimating and managing future demand. providing translation of the voice of the customer.

Double corporation acquired all of the common stock of simple company for

Calculate the cost of each capital component—in other words, the after-tax cost of debt, the cost of preferred stock (including flotation costs), and the cost of equity (ignoring flotation costs). use both the capm method and the dividend growth approach to find the cost of equity. calculate the cost of new stock using the dividend growth approach. what is the cost of new common stock based on the capm? (hint: find the difference between re and rs as determined by the dividend growth approach and then add that difference to the capm value for rs.)assuming that gao will not issue new equity and will continue to use the same target capital structure, what is the company’s wacc? e. suppose gao is evaluating three projects with the following characteristics. each project has a cost of $1 million. they will all be financed using the target mix of long-term debt, preferred stock, and common equity. the cost of the common equity for each project should be based on the beta estimated for the project. all equity will come from reinvested earnings. equity invested in project a would have a beta of 0.5 and an expected return of 9.0%.equity invested in project b would have a beta of 1.0 and an expected return of 10.0%.equity invested in project c would have a beta of 2.0 and an expected return of 11.0%.analyze the company’s situation, and explain why each project should be accepted or rejected g