1. Risk may be integrated into capital budgeting decisions by
a) adjusting the standard deviation of possible outcomes.
b)determining the expected value.
c)adjusting the discount rate.
d)adjusting the time horizon.

2.Stock valuation models are dependent upon
a) expected dividends, future dividend growth and an appropriate discount rate.
b)past dividends, flotation costs and bond yields.
c)historical dividends, historical growth and an appropriate discount rate.
d)all of the above.

3. The only difference in the cost of common stock (Ke) and the cost of new common stock (Kn) is the flotation cost on new common stock.
T.
F.

1. Risk may be integrated into capital budgeting decisions by

c)adjusting the discount rate.


2. Stock valuation models are dependent upon

a) expected dividends, future dividend growth and an appropriate discount rate.

3. The only difference in the cost of common stock (Ke) and the cost of new common stock (Kn) is the flotation cost on new common stock.
T.