Question 11 (4 points) 5 Listen A CEO has just learned about the static theory of capital structure. If he tries to apply this theory approach, which capital structure he's most likely to choose? 1) 100% equity. O2) 60% equity and 40% debt. O 3) 100% debt. O4) It does not matter which structure he chooses. Question 12 (4 points) 5 Listen Kennesaw Corp. has an inventory turnover of 5.2 and marks up the inventory an average of 20 percent over its acquisition cost. If the accounts payable period is 52 days and the accounts receivable period is 42 days, what is the operating cycle? 1) 105.02 days O2) 125.02 days 3) 131.83 days 4) 138.00 days Question 13 (4 points) 5 Listen Which of the following actions are associated with a flexible short-term financial policy? |- high investments in marketable securities II- minimal credit sales III- large inventory holdings IV- high level of accounts payable 1) I and Ill only 2) Il and Ill only 3) I and IV only 4) III and IV only Question 14 (4 points) Listen M&M Proposition I with tax states that: O 1) a firm's cost of equity increases as the debt-equity ratio of the firm decreases 2) a firm's weighted average cost of capital decreases as the firm's debt-equity ratio increases 3) the value of unlevered firm is equal to the value of a levered firm plus the value of the interest tax shield. 4) A firm's cost of capital is the same regardless of the mix of debt and equity used by the firm