Business Finance 4
- Created by: mustafaali1838
- Created on: 15-01-20 07:50
Other questions in this quiz
2. As debt is added to the capital structure, the:
- WACC will continually increase
- WACC will be unaffected
- Cost of debt can be expected to rise
- WACC will continually decrease
3. When the real rate of interest is less than the nominal rate of interest, then:
- Investment returns cannot increase the purchasing power of an investment
- Disinflation must be occuring
- The rate of inflation must be positive
- Nominal flows should be discounted with real rates
4. Why should managers assume they will receive a fair price for any new shares?
- Financial markets are highly competitive
- All new shares will sell as positive NPV investments
- New share prices are highly regulated
- All new shares must sell at par value
5. If a company's cost of capital is less than the required return on equity, then the firm:
- Has debt in its capital structure
- Is perceived to be safe
- Is all equity financed
- Is financed with more than 50% debt
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