Question 9 - C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=http M Gmail YouTube @ Maps GE News Translate e (626) How To Make... Finance Ch. S Flash... Q Interest Rates and.. Quiz - Chapter 17: Cap Structure - Li. Submitted 23/27 Total points awarded Help Exit The optimal capital structure has been achieved when the: Multiple Choice 0/1 points awarded Scored O debt-equity ratio is equal to 1. O weight of equity is equal to the weight of debt. cost of equity is maximized given a pretax cost of debt. debt-equity ratio is such that the cost of debt exceeds the cost of equity present value of the financial distress costs equals the present value of the tax shield on debt. Graw C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=htt Gmail YouTube Maps = News s Translate (626) How To Make... O Finance Ch. 8 Flash... Q a O Interest Rates and... Quiz - Chapter 17: Cap Structure - Li... i Submitted 23/27 Total points awarded Help Exit 20 In general, U.S. firms: Multiple Choice 0/1 points awarded Scored O tend to overweigh debt in relation to equity. x that are highly profitable tend to have lower target debt-equity ratios than unprofitable firms. O tend to maintain similar capital structures across all industries. tend to maximize the use of every dollar of the tax benefits of debt. that are family-owned tend to have very low levels of debt. Mc > Quiz - Chapter 17: Cap Structure - Li... Submitted 23/27 Total points awarded Help Exit Assume Forrest Corporation debtholders are promised payments in one year of $42 if the firm 22 does well and $18 if the firm does poorly. There is a 50/50 chance of the firm doing well or poorly. If debtholders are willing to pay $28.65 today to purchase this debt, what is the promised return to those debtholders? 0/1 points awarded Scored Multiple Choice O 4.7 percent 4.5 percent O -4.7 percent O 3.8 percent -3.8 percent MS Hill JUUL 5.0% 140Question 25 - Quiz - Chapter 17: x 5 New Tab x + X C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=http >OK) Gmail YouTube ) Maps GB News Translate (626) How To Make... Q Finance Ch. 8 Flash... Q a Q Interest Rates and. Quiz - Chapter 17: Cap Structure - Li... i Submitted 23/27 Total points awarded Help Exit 25 Rachel owns 100 percent of a gift shop with an equity value of $150,000. If she keeps the shop open 5 days a week, EBIT is $75,000. If the shop remains open 6 days a week, EBIT increases to $92,000 annually. Rachel needs an additional $50,000 which she can raise today by either selling stock or issuing debt at an interest rate of 7 percent. The principal amount would be repaid in equal annual payments at the end of the next five years. Ignore taxes. What will be the 0/1 points awarded cash flow for the next year to Rachel if she issues stock to another individual, remains open 5 days a week, and distributes all the residual cash flow to the shareholders? Scored Multiple Choice O $92,000 O $61,333 $69,000 O $42,000 $56,250 MC