Consider the Following to Answer the Question(s) Below

question 7

Multiple Choice

Consider the following to answer the question(s) below:
A recent survey of local cell phone retailers showed that of all cell phones sold last month, 64% had a camera, 28% had a music player, and 22% had both.
-Which of the following statements about cell phones sold last month is true?

• A) Having a camera and having a music player are mutually exclusive events.
• B) The intersection of having a camera and having a music player is zero.
• C) Having a camera and having a music player are independent events.
• D) Having a camera and having a music player are disjoint events.
• E) Having a camera and having a music player are not mutually exclusive events.

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Definitions:

Expected Perpetual EBIT

The forecasted continuous earnings before interest and taxes that a company expects to generate over an indefinite future period, assuming a steady state of operations.

Unlevered Cost of Capital

The cost of capital for a company that has no debt, representing its cost of equity.

Financial Leverage

The use of borrowed funds to increase the potential return of an investment.

All Equity Firm

A business that is financed entirely through equity capital, with no debt or borrowed funds.