A Hospital Requires That Patients Use the Food Services Provided

question 366

Multiple Choice

A hospital requires that patients use the food services provided by one firm with which the hospital contracts. Pizza Hut wants to sell its food to patients in the hospital too, but the hospital refuses. Pizza Hut sues the hospital because of the tie-in between hospital stays and food service. The Supreme Court will probably hold the hospital's rule is:

• A) a per se illegal tie-in sale
• B) an illegal tie-in sale under a rule of reason analysis because of the loss of competition
• C) legal because tie-in sales are per se legal
• D) legal because under a rule of reason analysis the tie-in is not seen to injure competition
• E) none of the other choices

Know the variables affecting the security market line (SML) approach to estimating expected return on a risky asset.

Differentiate between the after-tax cost of debt and the yield to maturity concerning bond prices and interest rates.

Understand how the SML approach assumes constancy in the reward-to-risk ratio and its implications for a firm's cost of equity.

Understand the financial challenges and resources available to entrepreneurs, including the difficulties of obtaining financing and the role of the Small Business Administration.

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