1. The best proxy for the risk-free rate is the yield on which of the following: __________.
A. yield on long-term T-bonds with 10 years the maturity used most frequently
B. yield on long-term T-bill with 10 years the maturity used most frequently
C. yield on long-term T-bill with 20 years the maturity used most frequently
D. yield on long-term T-bill with 30 years the maturity used most frequently
2. Which of the following is NOT one of the five ways a firm can utilize their free cash flow?
A. Pay dividends
B. Purchase financial assets such as marketable securities
C. Repurchase stock
D. Repay debt
E. Pay the net after-tax interest on debt
F. All of the above are ways a firm can utilize their free cash flow