Bank id 269606 type multiple choice correct schalheim

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QUESTION:4[QUESTION BANK ID:269606]TYPE:MULTIPLE CHOICECORRECTSchalheim Sisters Inc. has always paid out all of its earnings as dividends; hence, the firm has no retained earnings. This samesituation is expected to persist in the future. The company uses the CAPM to calculate its cost of equity, and its target capitalstructure consists of common stock, preferred stock, and debt. Which of the following events would reduce its WACC?
QUESTION:5[QUESTION BANK ID:269605]TYPE:MULTIPLE CHOICECORRECTA firm is considering a new project whose risk is greater than the risk of the firm’s average project, based on all methods forassessing risk. In evaluating this project, it would be reasonable for management to do which of the following?
QUESTION:6[QUESTION BANK ID:269419]TYPE:MULTIPLE CHOICECORRECTWhich of the following statements is correct?
QUESTION:7[QUESTION BANK ID:269453]TYPE:MULTIPLE CHOICECORRECTAccording to MM II, as a firm's debt-to-equity ratio increasesAIts financial risk increasesBIts operating risk increasesCThe expected return on equity increasesDThe expected return on equity decreases

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