Corporate Finance 10th Edition test bank ch16

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1、ch16Student:___________________________________________________________________________1.Theuseofpersonalborrowingtochangetheoverallamountoffinancialleveragetowhichanindividualisexposediscalled:A.homemadeleverage.B.dividendrecapture.C.theweightedaveragecostofcapital.D.privatedebtplacement.E.personal

2、offset.2.Thepropositionthatthevalueofthefirmisindependentofitscapitalstructureiscalled:A.thecapitalassetpricingmodel.B.MMPropositionI.C.MMPropositionII.D.thelawofoneprice.E.theefficientmarketshypothesis.3.Thepropositionthatthecostofequityisapositivelinearfunctionofcapitalstructureiscalled:A.thecapit

3、alassetpricingmodel.B.MMPropositionI.C.MMPropositionII.D.thelawofoneprice.E.theefficientmarketshypothesis.4.Thetaxsavingsofthefirmderivedfromthedeductibilityofinterestexpenseiscalledthe:A.interesttaxshield.B.depreciablebasis.C.financingumbrella.D.currentyield.E.tax-losscarryforwardsavings.5.Theunlev

4、eredcostofcapitalis:A.thecostofcapitalforafirmwithnoequityinitscapitalstructure.B.thecostofcapitalforafirmwithnodebtinitscapitalstructure.C.theinteresttaxshieldtimespretaxnetincome.D.thecostofpreferredstockforafirmwithequalpartsdebtandcommonstockinitscapitalstructure.E.equaltotheprofitmarginforafirm

5、withsomedebtinitscapitalstructure.6.Thecostofcapitalforafirm,R-WACC,inazerotaxenvironmentis:A.equaltotheexpectedearningsdividedbymarketvalueoftheunleveredfirm.B.equaltotherateofreturnforthatbusinessriskclass.C.equaltotheoverallrateofreturnrequiredontheleveredfirm.D.isconstantregardlessoftheamountofl

6、everage.E.Allofthese.7.Thefirm'scapitalstructurerefersto:A.thewayafirminvestsitsassets.B.theamountofcapitalinthefirm.C.theamountofdividendsafirmpays.D.themixofdebtandequityusedtofinancethefirm'sassets.E.howmuchcashthefirmholds.8.Ageneralruleformanagerstofollowistosetthefirm'scapitalstructuresuchthat

7、:A.thefirm'svalueisminimized.B.thefirm'svalueismaximized.C.thefirm'sbondholdersaremadewelloff.D.thefirmssuppliersofrawmaterialsaresatisfied.E.thefirmsdividendpayoutismaximized.9.Aleveredfirmisacompany