The value of a firm is maximized when the
A: cost of equity is maximized.
B: tax rate is zero.
C: levered cost of capital is maximized.
D: weighted average cost of capital is minimized.
A: cost of equity is maximized.
B: tax rate is zero.
C: levered cost of capital is maximized.
D: weighted average cost of capital is minimized.
D
举一反三
- The average of a firm's cost of equity and after tax cost of debt that is weighted based on the firm's capital structure is called the: A: reward to risk ratio B: weighted capital gains rate C: structured cost of capital D: weighted average cost of capital
- A capital investment’s internal rate of return( ). A: Must exceed the cost of capital in order for the firm to accept the investment. B: C: Statements c and d are correct. D: Changes when the cost of capital changes. E: Is similar to the yield to maturity on a bon F: Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.
- A capital investment’s internal rate of return ( ) A: Changes when the cost of capital changes. B: Must exceed the cost of capital in order for the firm to accept the investment. C: Statements c and d are correct. D: Is similar to the yield to maturity on a bond. E: Is equal to the annual net cash flows divided by one half of the project’s cost when the cash flows are an annuity.
- Company A’s capital employed and its adjusted profit is $800m and $500m respectively. Its target capital structure is 75% equity 25% debt. The cost of equity is 18% and pre-tax cost of debt is 12%. What is the value of EVA using Economic Value Added approach?
- The capital structure that maximizes the value of a firm also: A: minimizes financial distress costs. B: minimizes the cost of capital. C: maximizesthe present value of the tax shield on debt. D: maximizes the value of the debt.
内容
- 0
Which one of the following terms is defined as the mixture of a firm's debt and equity financing? A: cash management B: cost analysis C: capital structure D: working capital management
- 1
Cost of capital isthe company’s cost of capital multiplied by the amount of the investment.
- 2
EVA = adjustedafter-tax operating income – (cost of invested capital – a percentage xadjusted average invested capital).
- 3
Many of these problems can be ________ by sensible planning.（ ） A: minimized B: maximum C: Maximized D: minimum
- 4
The rate of return is also called the A: discount rate only. B: discount rate and hurdle rate only. C: discount rate, hurdle rate, and opportunity cost of capital. D: discount rate and opportunity cost of capital only.