1. How does a firms financial structure differ from its capital structure?

2. Describe why capital structure is relevant to the value of the firm.

3. What are interest tax savings, and how do they affect the relevance of a firms financing decisions?

4. What are financial distress costs, and how are they related to the firms financing decisions?

5. How does the presence of financial distress costs, combined with the tax deductibility of interest (and the resulting interest tax savings), affect a firms weighted average cost of capital as the firm increases its use of debt financing from no debt to higher and higher levels of debt?

6. What are agency costs, and how do they become a relevant consideration in determining a firms capital structure?

7. Halmeoni Corn Dogs has 9 million in assets. The assets are funded with $3 million of debt and 6 million in equity. The of Halmeoni Corn Dogs is at 1.30. Assuming a tax rate of 35%, how much is the unlevered beta of the company?