1. How are NPV and maximizing shareholder value related?
The firm can maximize shareholder value by maximizing market share.
The firm can maximize shareholder value by maximizing firm profits.
The firm can maximize stockholder value by accepting projects with NPV's greater than or equal to zero.
The firm can maximize stockholder value by maximizing expected future cash-flows.
2. What does the term "floatation costs" mean in the context of raising capital?
The cost associated with reinvesting earnings back into the company.
The cost associated with raising external capital.
The cost of floating rate debt.
The opportunity cost associated with internal capital.