Quiz Ch 19 – T/F Impact of Enterprise Zone Subsidies on APV
Principles of Corporate Finance
Brealey, Myers, and Allen
13th Edition
True or false: Enterprise zone subsidies usually enhance APV.
True or false: Enterprise zone subsidies usually enhance APV.
True or false: The implementation of government restrictions has the potential to enhance the APV of a project.
True or false: Subsidized loans typically have a reducing impact on the APV of a project.
True or false: The MM formula for adjusted cost of capital highlights the contribution of the interest tax shield from permanent debt.
True or false: For healthy firms, the market value of short-term debt closely aligns with its book value.
True or false: When adapting WACC for alterations in debt ratios, use the following formula in the second step: rE = r + (r − rD) × (D/V).
True or false: It is generally advised NOT to use the APV method for international projects.
True or false: It is advisable to employ the book values of debt and equity when determining the WACC for a firm.
True or false: WACC remains stable even after preferred stock issuance.
True or false: The WACC formula is used to ascertain the cost of capital for a project characterized by moderate risk.