Capital Structure and Leverage 6. Which of the following statements is most correct? a. Increasing financial leverage is one way to increase a firmâ€™s revenues. b. Firms with lower fixed costs tend to have greater operating leverage. c. The debt ratio that maximizes EPS generally exceeds the debt ratio that maximizes share price. d. Statements a and b are correct. 7. As a rule, the optimal capital structure is found by determining the debt-equity mix that maximizes expected EPS. a. True b. False 8. The optimal capital structure simultaneously maximizes stock price and minimizes the WACC. a. True b. False 9. The firmâ€™s beta coefficient if it has no debt is called its: a. unlevered beta. b. levered beta. c. risk-free beta d. stand-alone beta 10. From the information below, select the optimal capital structure for Minnow Entertainment Company. a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50. b. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90. c. Debt = 60%; Equity = 40%; EPS = $3.18; Stock price = $31.20. d. Debt = 80%; Equity = 20%; EPS = $3.42; Stock price = $30.40. e. Debt = 70%; Equity = 30%; EPS = $3.31; Stock price = $30.00. Business Assignment Help, Business Homework help, Business Study Help, Business Course Help
We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique.
FALL 2018 HOMEWORK HELP| ASSIGNMENT HELP,…