For a Multi-Product Firm, If a Project's Beta Is Different

question 12

Multiple Choice

For a multi-product firm, if a project's beta is different from that of the overall firm, then the:

• A)CAPM can no longer be used.
• B)project should be discounted using the overall firm's beta.
• C)project should be discounted at a rate commensurate with its own beta.
• D)project should be discounted at the market rate.
• E)project should be discounted at the T-bill rate.

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Definitions:

Peripheral Route Persuasion

A method of persuasion that relies on superficial cues rather than the logical argumentation or the content of the message itself.

Cognitive Dissonance

The discomfort in one's mind caused by holding several contradictory beliefs, ideas, or values concurrently.

Central Route Persuasion

Central route persuasion is a method of persuasion that involves deeply processing the content of the message, focusing on the arguments and evidence presented.

Peripheral Route Persuasion

A means of persuasion that relies on superficial cues rather than the substantive quality of an argument, such as the attractiveness of a speaker.