1. In doing the SWOT, which of the following represents a traditional strength that Kodak leveraged into the new digital world particularly in its network of kiosks?
A. Paper manufacturing
B. Film manufacturing
C. Centralized developing
D. R&D
2. Evaluate each of the following statements about the Modigliani and Miller (MM) propo- sitions. Determine whether each statement is true or false. If the statement is false, please explain why.
(a) MM's propositions assume perfect nancial markets, with no distorting taxes or other imperfections.
(b) MM's proposition 2 says that the cost of equity increases with borrowing and that the increase is proportional to the debt-to-value (D/V) ratio.
(c) MM's proposition 2 assumes that increased borrowing does not affect the interest rate on the rm's debt.
(d) Borrowing does not increase financial risk and the cost of equity if there is no risk of bankruptcy.