Which of the following companies is likely to have a higher beta, and thus a higher cost of capital? a. An auto manufacturer who runs an assembly line with union workers b. A "high-tech" auto...

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Which of the following companies is likely to have a higher beta, and thus a higher cost of capital?


a. An auto manufacturer who runs an assembly line with union workers


b. A "high-tech" auto manufacturer with a fully automated line requiring only a handful of non-union workers.



Answered Same DayDec 25, 2021

Answer To: Which of the following companies is likely to have a higher beta, and thus a higher cost of capital?...

David answered on Dec 25 2021
119 Votes
Solution-
a. An auto manufacturer who runs an assembly line with union workers
Explanation-
Gener
ally, auto manufactures have higher beta because they run assembly lines with the union workers and they tend to have higher cost of capital when compared to the auto manufacturer who makes use of...
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