17-金融

17Student:___________________________________________________________________________1.Whenafirmhasnodebt,thensuchafirmisknownas:I)anunleveredfirm;II)aleveredfirm;III)anall-equityfirm  A. IonlyB. IIonlyC. IIIonlyD. IandIIIonly 2.Thecapitalstructureofthefirmcanbedefinedas:I)thefirm'smixofdifferentdebtsecurities;II)thefirm'smixofdifferentsecuritiesusedtofinanceassets;III)themarketimperfectionthatthefirm'smanagerscanexploit  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIII 3.Thetotalmarketvalue(V)ofthesecuritiesofafirmthathasbothdebt(D)andequity(E)is:  A. V=D-EB. V=E-DC. V=D×ED. V=D+E 4.Ifafirmisfinancedwithbothdebtandequity,thefirm'sequityisknownas:  A. unleveredequity.B. leveredequity.C. preferredequity.D. noneoftheoptions. 5.Underwhatconditionswouldapolicyofmaximizingthevalueofthefirmnotbethesameasapolicyofmaximizingshareholders'wealth?  A. Iftheissueofdebtincreasesthefinancialriskofthefirm'sequityB. IfthefirmissuesdebtforthefirsttimeC. IfthebetaofequityispositiveD. Ifanissueofdebtaffectsthemarketvalueofexistingdebt 6.Apolicyofmaximizingthevalueofthefirmisthesameasapolicyofminimizingtheweightedaveragecostofcapitalprovidingthat:I)thefirm'sinvestmentpolicyissettled;II)therearenotaxes;III)anissueofnewdebtdoesnotaffectthemarketvalueofexistingdebt  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIII 7.ModiglianiandMiller'sPropositionIstatesthat:  A. themarketvalueofanyfirmisindependentofitscapitalstructureB. themarketvalueofafirm'sdebtisindependentofitscapitalstructureC. themarketvalueofafirm'scommonstockisindependentofitscapitalstructureD. noneoftheoptions 8.Aninvestorcancreatetheeffectofleverageonhis/heraccountby:I)buyingequityofanunleveredfirm;II)investinginrisk-freedebtlikeT-bills;III)borrowingonhis/herownaccount  A. IonlyB. IIonlyC. IIIonlyD. IandIIIonly 9.IffirmUisunleveredandfirmLislevered,thenwhichofthefollowingistrue:I)VU=EU.II)VL=EL+DL.III)VL=EU+DL.  A. IonlyB. IandIIonlyC. I,II,andIIID. IIIonly 10.Ifaninvestorbuysaportion(X)ofanunleveredfirm'sequity,thenhis/herpayoffis:  A. (X)×(profits)B. (X)×(interest)C. (X)×(profits-interest)D. (1/X)×(profits) 11.Ifaninvestorbuysaportion(X)ofboththedebtandequityofaleveredfirm,thenhis/herpayoffis:  A. (X)×(profits)B. (X)×(interest)C. (X)×(profits-interest)D. noneoftheoptions 12.Ifaninvestorbuysaportion(X)oftheequityofaleveredfirm,thenhis/herpayoffis:  A. (X)×(profits)B. (X)×(interest)C. (X)×(profits-interest)D. (1/X)×(profits-interest) 13.Thelawofconservationofvalueimpliesthat:  A. thereturnonafirm'scommonstockisunchangedwhendebtisaddedtoitscapitalstructure.B. thevalueofanyassetispreservedregardlessofthenatureoftheclaimsagainstit.C. thereturnonafirm'sdebtisunchangedwhencommonstockisaddedtoitscapitalstructure.D. thevalueofanassetincreasesasdebtisreduced. 14.Aninvestorcanundotheeffectofleverageonhis/herownaccountby:I)investingintheequityofaleveredfirm;II)borrowingonhis/herownaccount;III)investinginrisk-freedebtlikeT-bills  A. IonlyB. IIonlyC. IIIonlyD. IandIIIabove 15.Ifanindividualwantstoborrowwithlimitedliability,he/sheshould:  A. investintheequityofanunleveredfirm.B. borrowonhis/herownaccount.C. investintheequityofaleveredfirm.D. investinarisk-freeassetlikeT-bills. 16.Valueadditivityworksfor:I)combiningassets;II)splittingupofassets;III)themixofdebtsecuritiesissuedbythefirm  A. IonlyB. IIonlyC. IandIIonlyD. I,II,andIII 17.Thelawofconservationofvalueimpliesthat:I)themixofseniorandsubordinateddebtdoesnotaffectthevalueofthefirm;II)themixofconvertibleandnonconvertibledebtdoesnotaffectthevalueofthefirm;III)themixofcommonstockandpreferredstockdoesnotaffectthevalueofthefirm  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIII 18.Thelawofconservationofvalueimpliesthat:I)themixofcommonstockandpreferredstockdoesnotaffectthevalueofthefirm;II)themixoflong-termandshort-termdebtdoesnotaffectthevalueofthefirm;III)themixofsecuredandunsecureddebtdoesnotaffectthevalueofthefirm  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIII 19.Capitalstructureisirrelevantif:I)capitalmarketsareefficient;II)eachinvestorcanborrow/lendonthesametermsasthefirm;III)therearenotaxbenefitstodebt  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIII 20.Foraleveredfirm:  A. asearningsbeforeinterestandtaxes(EBIT)increases,earningspershare(EPS)increasesbythesamepercentage.B. asEBITincreases,EPSincreasesbyalargerpercentage.C. asEBITincreases,EPSdecreasesbythesamepercentage.D. asEBITincreases,EPSdecreasesbyalargerpercentage. 21.Foranall-equityfirm,  A. asearningsbeforeinterestandtaxes(EBIT)increases,theearningspershare(EPS)increasesbythesamepercentageB. asEBITincreases,theEPSincreasesbyalargerpercentageC. asEBITincreases,theEPSdecreasesatthesamerateD. asEBITincreases,theEPSdecreasesbyalargerpercentage 22.AnEPS-operatingincomegraph,fordifferentdebtratios,showsthe:I)greaterriskassociatedwithdebtfinancing,whichisevidencedbyagreaterslope;II)thebreak-evenpointwhereEPSoftwodifferentdebtratiosareequal;III)theminimumearningsneededtopaythedebtfinancingforagivenlevelofdebt  A. IonlyB. IIonlyC. IIIonlyD. I,II,andIIIonly 23.AccordingtoanEPS-operatingincomegraph,debtfina