21-129 Which of the Following Has NOT Been a Factor

question 149

Multiple Choice

21-129 Which of the following has NOT been a factor deterring U.S.bank expansion abroad?

• A)The implementation of risk-based capital requirements effective in 1993.
• B)The increased competition from the large Japanese banks through the mid-1990s.
• C)The effects of the collapse of the financial markets in several emerging markets.
• D)The ability of the U.S.banks to achieve large excess capital positions in the second half of the 1990s.
• E)The passage of the European Community Second Banking Derivative.

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Definitions:

NPVGO

Net Present Value of Growth Opportunities refers to the present value of all future cash flows that a new project is expected to generate after accounting for the initial investment cost.

Equity Cost Of Capital

The rate of return that shareholders require on the equity or ownership interest they have in a company, used in evaluating investments and capital projects.

Firm's Equity

The value of a company's assets minus its liabilities and obligations, representing the ownership stake of the company's shareholders.