Suppose That Two Firms,A and B,have Identical Expected Returns but Firm

question 60

True/False

Suppose that two firms,A and B,have identical expected returns but Firm A has the possibility of a much higher return than Firm B.We can conclude from this that Firm A will have a higher coefficient of variation than Firm B.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed by the government, varying based on income or profit levels.

Present Value CCA Tax Shield (PVCCATS)

The present value of potential tax savings obtained from the capital cost allowance on depreciable assets, discounted back to the present.

Capital Cost Allowance (CCA)

A taxable expense in Canada that allows a business to claim depreciation on capital assets according to the rates prescribed by the Canada Revenue Agency.

Required Rate Of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put their money into a particular security or project.