Which of the following would be the BEST motivator for outsourcing information technology (IT) systems?
Responda
Internal IT resources are stretched
IT is regarded as a core strategic need
There is high risk of compromising confidentiality of information held on the IT system.
There is high risk of the cost of systems maintenance compromising other business objectives.
Questão 2
Questão
Reducing risk without any impact on business cash flows is most likely to
Responda
Decrease investors' required rate of return
Decrease the Enterprise Value
Decrease the PV of expected future business cash flows
Increase the cost of capital
Questão 3
Questão
Under CAPM, diversifiable risk: ( two answers )
Responda
Is also referred to as systematic risk. (systematic risk: affect all sectors)
Is a sector-specific but NOT firm-specific
Is unavoidable for most businesses
Affects share prices
Questão 4
Questão
Which of the following statements is true?
Responda
Risk seeking investors expect a positive correlation between risk and expected return.
Risk is an inevitable result of being in business
Minimising all risk should be a key objective for all firms
Questão 5
Questão
For a retail company, the possible loss of sales due to heavy snow forecast next week is best described as:
Responda
Risk
Volatility
Uncertainty
Pre-transactio exposure
Questão 6
Questão
Lower borrowing interest costs will usually be achieved by:
Responda
Increasing gearing
Accepting restrictive loan covenants
Bootstrapping
Actively pursuing riskier business rather than higher return
Making a special dividend payment
Questão 7
Questão
The average risk free interest is 2%. The FTSE world index returned minus1% last year, and similar poor equity returns are forecast for the coming year. Over the longer term, it is expected that the market risk premium will be 6%.
A company has a beta of one. Under CAPM, the company's cost of equity is?
Responda
Minus 1%
1%
3%
3.5%
8%
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