Problem 1: Which sector of the U.S. economy is the largest supplier of funds?
a. U.S. government
b. Corporate business
c. State and local governments
d. Households
Problem 2: Which sector of the U.S. economy is the largest user of funds?
a. U.S. government
b. Corporate business
c. State and local governments
d. Households
Problem 3: The most acceptable view of capital structure is that the weighted average cost of capital:
a. first falls with moderate levels of leverage and then increases as a firm's leverage becomes high.
b. does not change with leverage.
c. increases proportionately with increases in leverage.
d. increases with moderate amounts of leverage and then falls.
Problem 4: Which of the following typically would not affect the dividend policy of the firm?
a. Today's dividend policy is affected by future dividend expectations among investors.
b. Managers are afraid to decrease their voting control of the company by issuing stock dividends.
c. The failure of so many high-tech and dot.com companies showed that dividends are important to long-term investors.
d. The current and future cash flow expectations