罗斯公司理财题库cha1

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1、.Chapter17CapitalStructure:LimitstotheUseofDebt MultipleChoiceQuestions 1. Theexplicitcosts,suchasthelegalexpenses,associatedwithcorporatedefaultareclassifiedas_____costs. A. flotationB. betaconversionC. directbankruptcyD. indirectbankruptcyE. unlevered 2. Thecostsofavoidingabankruptcy

2、filingbyafinanciallydistressedfirmareclassifiedas_____costs. A. flotationB. directbankruptcyC. indirectbankruptcyD. financialsolvencyE. capitalstructure 3. Theexplicitandimplicitcostsassociatedwithcorporatedefaultarereferredtoasthe_____costsofafirm. A. flotationB. defaultbetaC. directb

3、ankruptcyD. indirectbankruptcyE. financialdistress 4. Indirectcostsoffinancialdistress: A. effectivelylimittheamountofequityafirmissues.B. serveasanincentivetoincreasethefinancialleverageofafirm.C. includedirectcostssuchaslegalandaccountingfees.D. tendtoincreaseasthedebt-equityratiodec

4、reases.E. includethecostsincurredbyafirmasittriestoavoidseekingbankruptcyprotection. word资料.5. Thelegalproceedingforliquidatingorreorganizingafirmoperatingindefaultiscalleda: A. tenderoffer.B. bankruptcy.C. merger.D. takeover.E. proxyfight. 6. Thevalueofafirmismaximizedwhenthe: A. cost

5、ofequityismaximized.B. taxrateiszero.C. leveredcostofcapitalismaximized.D. weightedaveragecostofcapitalisminimized.E. debt-equityratioisminimized. 7. Theoptimalcapitalstructurehasbeenachievedwhenthe: A. debt-equityratioisequalto1.B. weightofequityisequaltotheweightofdebt.C. costofequit

6、yismaximizedgivenapre-taxcostofdebt.D. debt-equityratioissuchthatthecostofdebtexceedsthecostofequity.E. debt-equityratioselectedresultsinthelowestpossibleweighedaveragecostofcapital. 8. Inaworldwithtaxesandfinancialdistress,whenafirmisoperatingwiththeoptimalcapitalstructure:I.thedebt-e

7、quityratiowillalsobeoptimal.II.theweightedaveragecostofcapitalwillbeatitsminimalpoint.III.therequiredreturnonassetswillbeatitsmaximumpoint.IV.theincreasedbenefitfromadditionaldebtisequaltotheincreasedbankruptcycostsofthatdebt. A. IandIVonlyB. IIandIIIonlyC. IandIIonlyD. II,III,andIVo