1) a firm's capital structure may in practice be influenced by the risk adverse nature of the firm's management, costs of financing options and projected stability of the firm's revenues.

TRUE OR FALSE

2) The break even model enables financial deciison makers to determine the quantity of output that must be sold to cover all operating expenses except fixed costs.

TRUE OR FALSE?

3)the deicision to use more financial leverage by the firm magnifies its possible varaition in earnings per share, compared to the use of more equityfinancing

TRUE OR FALSE?

4) Other things being equal, the following event will most likely increase the value of the firm:

A reduction in the overall risk of operations

an increase in cash outflows

a decrease in cash inflows

a decrease in the growth rate of expected cash dividends