Question 3 4 pts We have learned as financial manager's that the company's goal is to maximize shareholder value. We have also learned that management should approve capital budgeting projects that meet or exceed the firm's WACC. Therefore companies that have many acceptable capital budgeting projects may pay little or no dividends because earnings from operations are retained and re- invested in the firm (source of financing capital projects). This growth oriented strategy is often attractive to investors. True False Question 4 4 pts Which of the following statements are true? A. Leverage, which is the presence of fixed costs (both operating and possibly financing costs), magnifies the effects of changes in sales revenue on operating and net income. B. It is important for financial management to consider and evaluate the effects of leverage on the company's creation of value for its stockholders, and to establish a target optimal capital structure. C. The greater a company's business risk inherent in its operations (measured by operating leverage), the lower the amount of debt that is optimal in its capital structure. OD. A firm's optimal capital structure is the combination of debt and equity that maximizes the value of its stock price. E. Answers A., B and D. O F. All of the above are true statements