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Created by dylan_earl
over 9 years ago
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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 |
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