FIN 516 Week 8 Final Exam..
(CO B) Which of the following statements concerning MM extension with growth is not correct? Tax shields should be discounted at the unlevered cost of debt The value of a growing tax shield is > the value of a constant tax shield For a given D/S, the levered cost of equity is > the levered cost of equity under MM's original (with tax) assumptions For a given D/S, the WACC is < the WACC under MM's original (with tax) assumptions The total value of the firm increases with the amount of debt (CO D) Which of the following is not an advantage of going public? Facilitates stockholders diversification Increases the liquidity of the firm's stock Makes it easier to obtain new equity capital Establishes a market value for the firm Makes it easier for owner-managers to engage in profitable self dealings (CO I) Suppose hockey skates sell in Canada for 105 Canadian dollars, and 1 Canadian dollar equals . 71 U.S. dollars. If purchasing power parity (PPP) holds, what is the price of hockey skates in t
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