1. Which of the following accounts does not belong in the equity section of a balance sheet?
a- Long - term debt; b- Paid- in- surplus; c- retained earnings; d- preferred stock
2. Maximizing shareholder wealth means maximizing the ( select the best choice)
a- Value of the firm's profits b- Market value of the firm's common stock c- Value of the firm’s assets d- Value of the firms investments e- Value of the firm's cash.
3. Your firm can generate 300 in ebit per year forever. You are twice as risky as the average firm. The market is expected to earn 12% and the risk free rate is 2%. Find the value of the firm and the wacc if there are no taxes and you use no debt.