Top 10 Things to Know for TOF

Question	Answer
Main Objective of the firm is to maximize: _______________________ ___________	Shareholder Wealth
You cannot change the value of a firm by changing its _______________ policy	Dividend
With taxes and no costs of financial distress, you can max the value of a firm by eliminating all stock and replacing it with ________	Debt
With no taxes: as amount of debt increases, cost of debt and cost of equity may increase but the ________ on _________ will not change.	Return on Assets
If a project has Zero NPV when cash flows are discounted at WACC, then projects cash flows are ___________ to give all investors the returns they require	Sufficient
If a projects return lies _________ the Security Market Line, then it is an attractive investment opportunity	Above
You can reduce/eliminate ________ risk of stock but not the ___________ risk, by combining into portfolios	Unique but not Market
A project that just breaks even on an accounting basis will have a ______________ Net Present Value	Negative
Depreciation is not a cash flow, the ______ ______________ from depreciation is.	Tax Savings
When interest rates (compounding frequencies) increase, the Present Value __________________	Decreases

Resource summary

	Created by dylan_earl over 9 years ago