If Barker Co

question 5

Multiple Choice

If Barker Co. buys 51% of the shares of Carter Co.:

• A) Carter Co.'s board would have to approve the sale.
• B) Barker Co.'s board would have to approve the sale.
• C) both boards would have to approve the sale.
• D) both sets of shareholders would have to approve the sale.

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital in which each category of capital is proportionately weighted, representing the average cost of funding from all sources.

Pure Play

A company that focuses on a specific industry or product segment without diversification into other areas.

Capital Structure

The combination of borrowing and ownership funds that a business employs to finance its activities and expansion.

Financing

The act of providing funds for business activities, making purchases or investing.