Beta is useful in the calculation of the a companys

15. Beta is useful in the calculation of the:
a. company's variance.
b. company's discount rate.
c. company's standard deviation.
d. unsystematic risk.
e. company's market rate.

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16. A firm with high operating leverage is characterized by __________ while one with high
financial leverage is characterized by __________.
17. A key assumption of MM's Proposition I without taxes is:
18. MM Proposition II is the proposition that:
19. A type of short-term loan where the borrower sells its receivables to the lender up-front, but
at a discount to face value, is called:
a. a compensating balance.
b. assigned receivables financing.
c. a letter of credit.
d. factored receivables financing.
e. a bond.
20. Conflicts of interest between stockholders and bondholders are known as:
21. Which one of the following is a source of cash?

FINA274 Fall 2010 5
22. Which one of the following will decrease the operating cycle?