{99809F6E-777C-483B-9EA0-9B65E3D51D29}.tb13 DOC

Title {99809F6E-777C-483B-9EA0-9B65E3D51D29}.tb13
Author Linh Lina
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File Type DOC
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CAPITAL STRUCTURE CHAPTERAND 13 LEVERAGE (Difficulty: E = Easy, M = Medium, and T = Tough) Multiple Choice: Conceptual Easy: Business risk Answer: c Diff: E 1 . A decrease in the debt ratio will generally have no effect on . a. Financial risk. b. Total risk. c. Business risk. d. Market risk. e. None...

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(Difficulty: E = Easy, M = Medium, and T = Tough) Multiple Choice: Conceptual Easy: Business risk Answer: c Diff: E 1 . A decrease in the debt ratio will generally have no effect on . a. Financial risk. b. Total risk. c. Business risk. d. Market risk. e. None of the above is correct. (It will affect each type of risk above.) Business risk Answer: d Diff: E 2 . Business risk is concerned with the operations of the firm. Which of the following is not associated with (or not a part of) business risk? a. Demand variability. b. Sales price variability. c. The extent to which operating costs are fixed. d. Changes in required returns due to financing decisions. e. The ability to change prices as costs change. Business risk Answer: d Diff: E N 3 . Which of the following factors would affect a company's business risk? a. The level of uncertainty regarding the demand for its product. b. The degree of operating leverage. c. The amount of debt in its capital structure. d. Statements a and b are correct. e. All of the statements above are correct. Chapter 13- Page 1 CHAPTER 13 CAPITAL STRUCTURE AND LEVERAGE...

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