fin 600 week 6 quiz…ALL CORRECT ANSWERS GUARANTEED

The main advantage of debt financing for a firm is: 
I) no SEC registration is required for bond issue 
II) interest expense of a firm is tax deductible 
III) unlevered firms have higher value than levered firms

If a firm permanently borrows $100 million at an interest rate of 8%, what is the present value of the interest tax shield? (Assume that the tax rate is 30%)

In order to calculate the tax shields provided by debt, the tax rate used is the:

The reason that MM Proposition I does not hold good in the presence of corporate taxes is because:

Assuming that bonds are sold at a fair price, the benefits from the tax shield go to the:

The pecking order theory of capital structure predicts that:

Capital budgeting decisions that include both investment and financing decisions can be analyzed by: 
I) Adjusting the present value 
II) Adjusting the discount rate 
III) Ignoring financing mix

The after-tax weighted average cost of capital is determined by:

In calculating the weighted average cost of capital, the values used for D, E and V are:

A firm has a total market value of $10 million and debt has a market value of $4 million. What is the after-tax weighted average cost of capital if the before - tax cost of debt is 10%, the cost of equity is 15% and the tax rate is 35%?

Given the following data for year-1: 
Profits after taxes = $20 millions; 
Depreciation = $6 millions;
Interest expense = $4 millions; 
Investment in fixed assets = $12 millions;
Investment in working capital = $4 millions.
Calculate the free cash flow (FCF) for year-1:

Lowering debt-equity ratio of a firm can change:
I) financing proportions 
II) cost of equity 
III) cost of debt 
IV) effective tax rate

Floatation costs are incorporated into the APV framework by:

Subsidized loans have the effect of:

APV method is most useful in analyzing: