Use the Information for the Question(s) Below

question 68

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 Bernard Industries is closest to

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

Identify stages in the process of social change and the influence of technology and media.

Understand the sociological perspectives on rumors, urban legends, and collective behavior.

Examine the role of discontent, social conditions, and theories of participation in the formation and mobilization of social movements.

Differentiate between theoretical perspectives on individual behavior within crowds and social movements.

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Definitions:

African Americans

A racial or ethnic group in the United States characterized by an ancestry linked to Africa, particularly sub-Saharan Africa.

Wage Differential

The variation in wages earned by individuals in different jobs, industries, geographic locations, or by workers with varying skill levels.

Racial Prejudice

Racial Prejudice involves preconceived negative judgments or opinions about individuals based on their racial or ethnic background.

Discrimination Coefficients

Measures that quantify the extent to which different groups are treated differently based on certain attributes.