Bloom and Co

question 1

Multiple Choice

Bloom and Co.has no debt or preferred stock- it uses only equity capital,and has two equally-sized divisions.Division X's cost of capital is 10.0%,Division Y's cost is 14.0%,and the corporate (composite) WACC is 12.0%.All of Division X's projects are equally risky,as are all of Division Y's projects.However,the projects of Division X are less risky than those of Division Y.Which of the following projects should the firm accept?

• A) A Division Y project with a 12% return.
• B) A Division X project with an 11% return.
• C) A Division X project with a 9% return.
• D) A Division Y project with an 11% return.
• E) A Division Y project with a 13% return.

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Definitions:

Emotional Intimacy

The closeness between two or more people that allows them to share personal feelings, thoughts, and experiences in a deeply trusting and empathetic manner.

Massage Parlors

Establishments where massages are provided, which may sometimes clandestinely offer sexual services.

Sexual Enticements

Involve actions or communications meant to allure, tempt, or seduce someone into sexual activity.

Sexually Assaulted

Refers to being subjected to unwanted sexual contact or actions by another individual without consent.