FINA 3000 Study Guide - Final Guide: Bobby Bonilla, Tax Rate, Discounted Cash Flow
Document Summary
If we decide to use the firm beta for finding the project cost of capital, we run the risk of accepting a project we should reject. An etf trades once a day just like a mutual fund. The typical management fee for a full service broker is 1% of assets. A project has greater systematic risk than the firm"s typical. The term (cid:498)load(cid:499) represents the risk measure of a mutual fund. A (cid:498)no load(cid:499) fund is then one that is fully diversified. The debt ceiling has not been increased in the last 10 years. In our discounted cash flow model, the time period where we can predict dividends is called the forecast period. When a side effect hurts sales of existing products within the firm, we say it cannibalizes revenue. For project analysis, the firm would prefer to use straight-line depreciation over the macrs approach.
