19.    Which of the following improve(s) the corporate gover…

19.    Which of the following improve(s) the corporate governance of a firm? I. A larger fraction of independent directors on the boardII. Having the CEO serve as the chairman of the board of directorsIII. Block ownership by an active institutional investor who is trying to maximize shareholder wealth

The Francis Company is expected to pay a dividend of D1 = $1…

The Francis Company is expected to pay a dividend of D1 = $1.25 per share at the end of the year, and that dividend is expected to grow at a constant rate of 6.00% per year in the future. The company’s beta is 1.15, the market risk premium is 5.50%, and the risk-free rate is 4.00%.  What is the company’s current stock price?

Langston Labs has an overall (composite) WACC of 10%, which…

Langston Labs has an overall (composite) WACC of 10%, which reflects the cost of capital for its average asset. Its assets vary widely in risk, and Langston evaluates low-risk projects with a WACC of 8%, average-risk projects at 10%, and high-risk projects at 12%.  The company is considering the following projects:                                  Project                           Risk                   Expected Return                                    A                               High                            15%                                    B                            Average                         12%                                    C                               High                            11%                                    D                               Low                              9%                                    E                               Low                              6%   Which set of projects would maximize shareholder wealth?