Use the Information for the Question(s) Below

question 23

Multiple Choice

Use the information for the question(s) below.
Consider two firms, Chihuahua Corporation and Bernard Industries, that are each expected to pay the same $1.5 million dividend every year in perpetuity. Chihuahua Corporation is riskier and has a cost of capital of 15%. Bernard Industries is not as shaky as Chihuahua, so Bernard has a cost of capital of only 10%. Assume that the market portfolio is not efficient. Both stocks have the same beta and the CAPM would assign them both an expected return of 12%.
-The market value for Chihuahua Corporation is closest to

• A) $10.0 million.
• B) $12.5 million.
• C) $12.0 million.
• D) $15.0 million.

Differentiate between observational and experimental studies.

Identify and explain common sources of bias in surveys and studies.

Recognize factors important in designing questionnaires to minimize errors.

Understand the concept of sampling and various sampling techniques.

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Definitions:

Life-Threatening

Describing a condition, illness, or situation that has the potential to cause death or serious harm if not addressed immediately.

Naturally Acquired Passive

Immunity obtained passively through the transfer of antibodies from mother to fetus or through breast milk, without direct exposure to pathogens.

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to the fetus while removing waste products.

Breast Milk

The milk produced by a human mother's breasts, providing optimal nutrition for infants.