# There are 24 t/f and multiple choice questions of corporate finance.

There are 24 T/F and Multiple Choice Questions of Corporate Finance.Which could not find online, so I need professional to finish themSuch as:1. Sensitivity and scenario analysis aid the capital budgeting decision process by changing the underlying assumptions on which the decision is based.2. In the accounting break-even the EAC is used to allocate the initial investment at its opportunity cost over the life of the project.Read the questions (TF and Multiple Choice Questions.docx) first, before you bid.Make sure you have confidence to do it well.After I submit the answers, I will get the grade; if the grade is lower than 70%, I will ask for refund.
Question 1 Sensitivity and scenario analysis aid the capital budgeting decision process by changing the underlying assumptions on which the decision is based.True False
1 points   Question 2 In the accounting break-even the EAC is used to allocate the initial investment at its opportunity cost over the life of the project.True False
1 points   Question 3 The slope of the capital market line is the equilibrium price of risk in terms of expected return, (E(RM) – RF) / σM .True False
1 points   Question 4 The two-fund separation in the CAPM equilibrium means that every investor holds a combination of the well-diversified market portfolio and the risk-free asset.True False
1 points   Question 5 The SML is a graphical presentation of the relationship between a security’s expected return and its beta.True False
1 points   Question 6 If other things remain the same, the higher the standard deviation, the lower the beta of a security.True False
1 points   Question 7 The beta of a security is estimated as the slope of the regression equation, where the dependent variable (vertical axis) is the (excess) return on the security and the independent variable (horizontal axis) is the (excess) return on the market portfolio.True False
1 points   Question 8 If a security is above the SML, a mean-variance investor would sell the security because it is overvalued.True False
1 points   Question 9 The cost of debt of a firm is equal to one plus the marginal corporate tax rate (1 + TC) multiplied by the yield to maturity of its outstanding debt.True False
1 points   Question 10 The adjusted beta is always lower than the unadjusted beta.True False
1 points   Question 11 One method of estimating the growth rate of a company is to use the retention growth model, where the growth rate (=g) is estimated as the ROE multiplied by the plowback ratio.True False
1 points   Question 12 The financial leverage is the extent to which fixed-income securities are used in a firm’s capital structure.True False
1 points   Question 13 As the debt ratio of a firm increases, its equity beta increases because of the added financial risk.True False
1 points   Question 14 MM’s proposition I under no taxes implies that the cost of equity of a firm remains the same as the firm uses more debt because of the no-tax assumption.True False
1 points   Question 15 MM’s proposition I under no taxes implies that an issue of debt increases both the expected earnings per share (EPS) and the risk of the EPS. As a result, the stock price remains the same.True False
1 points   Question 16 _____ evaluates the NPV of a project with respect to changes in one variable while holding others constant.         Sensitivity analysis               Scenario analysis               Simulation               Mean Variance model
1 points   Question 17 The present value (PV) break-even point is better than the accounting break-even point because         PV break-even point is the same as the sensitivity analysis.               PV break-even point covers the economic opportunity costs of the investment.               PV break-even point covers the fixed costs of production, which the accounting break-point does not.               PV break-even point covers the variable costs of production, which the accounting break-even point does not.
1 points   Question 18 An investor who wishes to form a portfolio that lies to the right of the optimal risky portfolio on the Capital Market Line has to         lend some of her money at the risk-free rate and invest the rest in the optimal risky portfolio.               borrow some money at the risk-free rate and invest it in the optimal risky portfolio               invest only in the risky securities.               hold a portfolio which is not diversified.
1 points   Question 19 If other things remain the same, diversification is more effective when         securities returns are positively correlated.               securities returns are uncorrelated.               securities returns are negatively correlated.               securities returns are high.
1 points   Question 20 A measure of how much the returns of two risky assets move together is         variance               standard deviation               covariance               semi-variance
1 points   Question 21 The optimal risky portfolio can be identified by finding ______ .          the minimum variance point on the efficient frontier               the maximum return point on the efficient frontier               the tangency point of the capital market line and the efficient frontier               none of the above answers is correct.
1 points   Question 22 Which one of the following is not a determinant of beta of the equity of a company?         cyclicality of revenues               operating leverage               financial leverage               All of the above are determinants of beta.
1 points   Question 23 When the SML is written in the following form, the second tem (underlined) in the equation represents ______________: RS,L = RF + βS,U (RM – RF) + βS,U (B/S) (RM – RF)          total risk premium               business risk premium               financial risk premium               non-systematic risk premium
1 points   Question 24 When we consider the corporate taxes, the value of a levered firm can be shown as the next equation: VL = VU + tc B. The last tem (=tc B) in the equation above represents _______.          present value of taxes               present value of tax shields               present value of financial risk premium               present value of bankruptcy costs

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