A 167 b 112 c 105 d if sales increases by 12 ebit

Info icon This preview shows pages 6–8. Sign up to view the full content.

View Full Document Right Arrow Icon
a. 1.67 b. 1.12 c. 1.05 d. 1.00 13-30. If sales increases by 12% EBIT increases by 15% Net Income increases by 25% Interest expense increases by 10% Calculate DCL: a. 1.12 b. 1.67 c. 1.95 d. 2.08 159
Image of page 6

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
13-31. The mixture of funding sources that a firm uses to finance its assets is: a. capital structure b. financial leverage c. operating leverage d. financial operations 13-32. A small group of investors using borrowed funds to purchase all the shares of a publicly traded company is called: a. initial public offering b. equity carve-out c. leveraged buyout d. underwriting 13-33. Factors affecting the optimal capital structure include: a. the cost of debt, preferred stock, and common equity b. market conditions c. investor perceptions d. all of the above 13-34. Which of the following statements is true? a. The optimal capital structure can be determined using a complicated formula and managerial expertise. b. Leveraged buyouts decrease bondholder (creditor) risk. c. The risk on debt for investors is higher than the risk on equity. d. The interest payment tax shield lowers the cost of debt. 13-35. Fixed costs affect: a. operating leverage b. financial leverage c. capital structure d. leveraged buyouts 160
Image of page 7
CHAPTER THIRTEEN Multiple Choice Answers 13-1. C (Page 387) 13-2. A (Comprehensive) 13-3. B (Page 387) 13-4. A (Page 387) 13-5. B (Pages 378-379) 13-6. D (Page 387) 13-7. A (Page 380) 13-8. C (Page 380) 13-9. A (Page 380) 13-10. C (Page 380) 13-11. D (Page 378-379) 13-12. B (Comprehensive) 13-13. D (Comprehensive) 13-14. C (Page 382) 13-15. A (Page 382) 13-16. B (Pages 383-384) 13-17. B (Page 381) 13-18. A (Pages 382-383) 13-19. A (Page 384) 13-20. B (Page 384) 13-21. D (Page 384) 13-22. B (Pages 384-385) 13-23. B (Page 385) 13-24. D (Page 392) 13-25. D (Pages 384-385) 13-26. A (Page 394) 13-27. A (Page 395) 13-28. A (Page 395) 13-29. A (Page 382-383) 13-30. D (Page 384-385) 13-31. A (Page 378) 13-32. C (Page 392) 13-33. D (Comprehensive) 13-34. D (Comprehensive. 13-35. A (Page 378) 161
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern