corporatio finance test bank chapter 16 答案.doc

Chapter 16 Financial Leverage and Capital Structure Policy ? Multiple Choice Questions? 1.?Homemade leverage is:?A.?the incurrence of debt by a corporation in order to pay dividends to shareholders.B.?the exclusive use of debt to fund a corporate expansion project.C.?the borrowing or lending of money by individual shareholders as a means of adjusting their level of financial leverage.D.?best defined as an increase in a firms debt-equity ratio.E.?the term used to describe the capital structure of a levered firm. ? 2.?Which one of the following states that the value of a firm is unrelated to the firms capital structure??A.?Capital Asset Pricing ModelB.?MM Proposition IC.?MM Proposition IID.?Law of One PriceE.?Efficient Markets Hypothesis ? 3.?Which one of the following states that a firms cost of equity capital is directly and proportionally related to the firms capital structure??A.?Capital Asset Pricing ModelB.?MM Proposition IC.?MM Proposition IID.?Law of One PriceE.?Efficient Markets Hypothesis ? 4.?Which one of the following is the equity risk that is most related to the daily operations of a firm??A.?market riskB.?systematic riskC.?extrinsic riskD.?business riskE.?financial risk ? 5.?Which one of the following is the equity risk related to a firms capital structure policy??A.?marketB.?systematicC.?extrinsicD.?businessE.?financial ? 6.?Butter Jelly reduced its taxes last year by $350 by increasing its interest expense by $1,000. Which of the following terms is used to describe this tax savings??A.?interest tax shieldB.?interest creditC.?financing shieldD.?current tax yieldE.?tax-loss interest ? 7.?The unlevered cost of capital refers to the cost of capital for a(n):?A.?private entity.B.?all-equity firm.C.?governmental entity.D.?private individual.E.?corporate shareholder. ? 8.?The explicit costs, such as legal and administrative expenses, associated with corporate default are classified as _____ costs.?A.?flotationB.?issu