The Allied Computer Co

question 63

True/False

The Allied Computer Co.has sales of $300 million, a net profit margin of 9%, and 10 million shares of common stock outstanding.It has no preferred stock outstanding.If Allied stock trades at $50 per share, it has a price/earnings ratio of 20.9.

Apply the cost of capital concepts, including the weighted average cost of capital (WACC), in project evaluation.

Understand and calculate the cost of equity and debt financing.

Evaluate the effect of a project's risk on its required rate of return and capital cost.

Apply the dividend growth model to determine stock prices.

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Definitions:

Psychosocial Development

Erikson’s theory, which emphasizes the importance of social relationships and conscious choice throughout eight stages of development.

Erik Erikson

A psychologist known for his theory on the psychosocial development of human beings.

Sigmund Freud

An Austrian neurologist and the founding father of psychoanalysis, a method for treating psychopathology through dialogue between a patient and a psychoanalyst.

Abraham Maslow

A psychologist best known for creating Maslow's hierarchy of needs, a theory in psychology that prioritizes human needs in the shape of a pyramid, with the most fundamental needs at the bottom.