1) A firm can directly affect is cost of capital in which of the following ways?

Changing its capital structure Changing its dividend payout ratio By altering its capital budgeting decision rules All of the above are factors the firm can control

2) Suppose you plan to contribute an equal amount of money at the beginning of each year into your retirement account over the next 30 years to accumulate a sum of $750,000. How much should your contribution be if you were to earn an interest rate of 6 percent per year?

A. $5,450.00 B. $9,487.00 C. $8,950.00 D. $9,950.00

3) A firm has an issue of $1000 par value bonds with a 14 percent stated interest rate outstanding. The issue pays interest annually and has 10 years remaining to its maturity date. If bonds of similar risk are currently earning 14 percent, the firm's bond will sell for ______ today.

A. at par value B. less than par value C. greater than par value D. none of the above

4) ______ is the actual amount each common stockholder would expect to receive if the firm's assets are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among the common stockholders.

A. Liquidation value B. Book value C. The P/E multiple D. The present value of the dividends