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Below are five comparable companies that compete in the Widget industry: Company V, Company W,...

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Accounting

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Below are five comparable companies that compete in the Widget industry: Company V, Company W, Company X, Company Y, and Company Z. Assume the greater the assets on the balance sheet, the larger the company. Use the financial statement information in the table below to help answer questions 14-17. Dividends Net Income 26 14.3% 53 Debt/Equity Company VI 0.53851 Company W 3.0000 Company X 0.5625 Company Y 0.4925 Company Z 4.0000 YTM 8.0% 9.0% 6.0% 6.0% 11.0% Total Assets 100 1060 1000 9701 100 Tax Rate 30.0% 35.0% 35.0% 30.0% 30.0% Beta Book Value 1.25 65 1.35 265 1.101 640 1.15 6501 1.40 20 120 194 15.2% 12.9% 13.4% 15.6% 7 16. The company with the lowest weighted average cost of capital is: A. Company V B. Company w C. Company X D. Company Y E. Company Z 17. Based on the betas for all companies, the Widget industry is more likely non-cyclical than cyclical. Evaluate the underlined words in italics. True or False? A. True B. False

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