Stock of Gould and Silber Inc

question 70

Multiple Choice

Stock of Gould and Silber Inc. has a beta of -1. If the market declines by 10%, Gould and Silber would be expected to

• A) decline by 10%.
• B) rise by 10%.
• C) not respond to market fluctuations.
• D) decline by 1%.

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Definitions:

Present Value

The present day value of an anticipated future amount of money or series of cash receipts, calculated with an established rate of return.

CCA Tax Shield

Refers to the reduction in taxable income for businesses through the deduction of depreciation on long-term assets.

Operating Cash Flow (OCF)

Cash generated from a company's regular business operations, indicating its ability to generate sufficient revenue to maintain operations.

Equivalent Annual Cost

A financial metric used to compare the cost effectiveness of various investments with different lifespans, by converting costs into an annualized figure.