Quiz Ch 13 – Capital Structure Decision Definition
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
What do capital structure decisions pertain to?
What do capital structure decisions pertain to?
The company’s cost of capital represents the anticipated return on a collection of the company’s:
What does it signify if a company earns its WACC on its assets?
What is the equivalent of the slope of the security market line?
True or false: The WACC is commonly adjusted upwards for riskier projects and downwards for safer projects when used as a discount rate.
True or false: Higher debt ratios may lead to increased returns demanded by debtholders.
True or false: Capital structure describes the combination of long-term debt and equity financing in a firm.
True or false: Preferred stock is NOT factored into the firm’s weighted average cost of capital (WACC).
True or false: CAPM and DDM can both determine the cost of equity financing.
True or false: A company’s capital structure encompasses the combination of its short-term financing.