1. The target capital structure is considered to be optimum because it:
a. maximizes common stock prices b. maximizes the weighted average cost c. minimized debt d. minimizes after-tax cost of debt Answer?
2. Investors price securities so that their expected return is equal to:
a. ten percent. b. their required rate of return. c. Treasury bond yields. d. zero.
3. A graph of the firm’s investment opportunities ranked in order of the projects’:
a. discounted payback b. internal rate of return c. net present value d. payback