final 3 fundamentals of corporate finance, 4th edition brealey

ng break-even III An increased degree of operating leverage IV None of the above A) I only B) II only C) III only D) IV only E) II and III only 43.Which of the following is (are) true concerning the accounting break-even point? I The net income is zero II The net present value is zero III The operating cash flow is zero IV The internal rate of return is zero A) I only B) I and IV only C) II only D) III only E) II and IV only 44 All else the same, if you decrease fixed costs, which of the following will also decline? I Operating leverage II Accounting break-even III Operating cash flow IV Cash flow break-even A) I and II only B) II and IV only C) I, II, and III only D) I, II, and IV only E) I, II, III, and IV 45 Averaging the deviations from the mean for a portfolio of securities will: A) compute the standard deviation B) compute the variance C) equal zero D) equal the number of securities in the portfolio E) equal the Beta 46 Which of the following are included in the market prices if the market is semi-strong efficient? I All historical information II All insider information III All public information IV All information of any kind A) I only B) III only C) I and III only D) I, II, and III only E) I, II, III, and IV 47 The slope of the security market line equals: A) one B) beta C) beta x (Rm – Rf) D) the market risk premium E) the expected return on the market portfolio 48 Why is debt financing said to include a tax shield for the company? A) Taxes are reduced by the amount of the debt B) Taxes are reduced by the amount of the interest C) Taxable income is reduced by the amount of the debt D) Tax expenses is Debt x (1 – Tax Rate) E) Taxable income is reduced by the amount of the interest 49 If a company’s WACC is less than the required return on equity, then the firm: A) has debt in its capital structure B) is perceived to be less risky than most firms C) must have convertible debt D) cannot be using any debt E) is efficiently priced and lies on the SML 50 The cost of capital in a firm that has both debt and equity A) Is equal to the cost of debt or equity, depending on which type of financing the firm uses more of B) Is equal to the rate of return as calculated by CAPM C) Is what a firm must earn on a project to compensate investors for the use of their funds D) Will be the equity cost or the debt cost, which ever is higher E) Will be the equity cost or the debt cost, which ever is lower  ... cost of capital in a firm that has both debt and equity A) Is equal to the cost of debt or equity, depending on which type of financing the firm uses more of B) Is equal to the rate of return... company? A) Taxes are reduced by the amount of the debt B) Taxes are reduced by the amount of the interest C) Taxable income is reduced by the amount of the debt D) Tax expenses is Debt x (1 –...46 Which of the following are included in the market prices if the market is semi-strong efficient? I All historical information II All insider