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Question 1 (1 point)
When we want to measure a firm's capital structure, we will use WACC as
Question 1 options:
| | we want to weight the quantity and costs of Debt, Preferred Stock and Equity |
| | we want to view through both book value and market value lenses |
| | we will want to compare to capital structure and earnings and cash flow results of peers |
| | all of the above |
Question 2 (1 point)
When we assess risk of a business assuming the pure risks of a business with no debt (financial debt), we are focused on
Question 2 options:
| | Operating Leverage Risk |
| | Financial Risk |
| | Business Risk |
| | Dividend Pay-Out Risk |
Question 3 (1 point)
When we are assessing fixed costs in a business to assess variability of sales and its impact on returns on invested capital, we are focused on
Question 3 options:
| | Business Risk |
| | Operating Leverage |
| | Financial Risk |
| | Interest Rate Risk |
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