The optimal capital structure has been achieved when the:   Multiple Choice   cost of equity is maximized given a pretax cost of debt.   debt-equity ratio results in the lowest possible weighted average cost of capital.   debt-equity ratio is such that the cost of debt exceeds the cost of equity.   weight of equity is equal to the weight of debt.   debt-equity ratio is equal to 1.

One should determine the after-tax weighted average cost of capital by   Multiple Choice A) dividing the weighted average before-tax cost of debt to the weighted average cost of equity.  B) adding the weighted average before-tax cost of debt to the weighted average cost of equity.  C) adding the weighted average after-tax cost of debt to the weighted average cost of equity.  D) multiplying the weighted average after-tax cost of debt by the weighted average cost of equity.

Ch. 17. True/False. The optimal amount of debt produces the highest weighted average cost of capital. Group of answer choices True False

The capital asset pricing model expresses the cost of equity as a function of a return on riskless assets, a market premium, and: Select one:a. Unsystematic risk.b. None of these.c. The cost of debt.d. Systematic risk.

Current assets minus current Ilabilitles Is: Multiple Cholce Working capital. Financial leverage. Profit margin. Current ratio. Quick assets.

A firm's overall cost of financing is equal to: I. Its weighted-average cost of capitalII. The required rate of return of its capital providersIII. The returns being generated by investments Select one: A. I only B. I and II only C. I and III only D. I, II, and III

While computing the weighted average cost of capital, the   is the better alternative when the market value is not readily available.

1. Determine the weighted average cost of capital (WACC) for Vigour Pharmaceuticals. use the following Formulae: WACC: (E/ V) x R e + ( D/ V) x R d x (1-Tc) whereas:  E  is for Equity ( market value of firm's equity)  D is for Debt ( market value of firm's dept) V is for Value ( combine market value which is D + E) R e is the cost of equity R d is the cost of debt  Tc is the corporate tax rate

In general, the cost of debt capital is lower than the cost of equity capital. For this reason, it might be expected that firms with high debt ratios would have a lower weighted average cost of capital. Explain at least one reason why this is not the case.

The optimal capital structure: a. Maximizes the value of equity but not the tax shield associated with debtb. Minimizes the tax shield associated with debtc. Maximizes the value of the company but not necessarily the tax shield associated with debtd. Maximizes the value of the company and the tax shield associated with debt