Errors in the discount rate can be problematic because (check all that apply): a. This can lead to mistaken calculations of earnings before interest and taxes (EBIT). b. This produces higher measured firm beta. c. This can lead to erroneous decisions to repurchase shares. d. This can lead to mistaken investment decisions.

Errors in the discount rate can be problematic because (check all that apply): a. This can lead to mistaken calculations of earnings before interest and taxes (EBIT). b. This produces higher measured firm beta. c. This can lead to erroneous decisions to repurchase shares. d. This can lead to mistaken investment decisions.

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter25: Portfolio Theory And Asset Pricing Models

Section: Chapter Questions

Problem 11MC

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Question 1

Errors in the discount rate can be problematic because (check all that apply):

a. This can lead to mistaken calculations of earnings before interest and taxes (EBIT).

b. This produces higher measured firm beta.

c. This can lead to erroneous decisions to repurchase shares.

d. This can lead to mistaken investment decisions.

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