公司理财 习题库 Chap7.docVIP

CHAPTER 17 Financial Leverage and Capital Structure Policy I. DEFINITIONS HOMEMADE LEVERAGE a 1. The use of personal borrowing to change the overall amount of financial leverage to which an individual is exposed is called: a. homemade leverage. b. dividend recapture. c. the weighted average cost of capital. d. private debt placement. e. personal offset. MM PROPOSITION I b 2. The proposition that the value of the firm is independent of its capital structure is called: a. the capital asset pricing model. b. MM Proposition I. c. MM Proposition II. d. the law of one price. e. the efficient markets hypothesis. MM PROPOSITION II c 3. The proposition that the cost of equity is a positive linear function of capital structure is called: a. the capital asset pricing model. b. MM Proposition I. c. MM Proposition II. d. the law of one price. e. the efficient markets hypothesis. BUSINESS RISK d 4. The equity risk derived from a firm’s operating activities is called _____ risk. a. market b. systematic c. extrinsic d. business e. financial FINANCIAL RISK e 5. The equity risk derived from a firm’s capital structure policy is called _____ risk. a. market b. systematic c. extrinsic d. business e. financial INTEREST TAX SHIELD a 6. The tax savings of the firm derived from the deductibility of interest expense is called the: a. interest tax shield. b. depreciable basis. c. financing umbrella. d. current yield. e. tax-loss carryforward savings. UNLEVERED COST OF CAPITAL b 7. The unlevered cost of capital is: a. the cost of capital for a firm with no equity in its capital structure. b. the cost of capital for a firm with no debt in its capital structure. c. the interest tax shield times pretax net income. d. the cost of preferred stock for a firm with equal parts debt and common stock in its capital structure. e. equal to the profit margin for a firm with some debt in its capital structure. DIRECT BANKRUPTCY COSTS c 8. The explicit cos