1. ABC CO. has decided to pay all its debt. In order to do that the company pushes hard and raises equity capital. All things being constant, how does the enterprise value of ClearDebt Co. change if it uses the entire equity amount to repay debt

A. Stays constant

B. Increases

C. Decreases

D. Not enough Information to answer the equation

2. The P/E ratio is equivalent to

A. Equity value/net income

B. Enterprise vale/net income

C. Enterprise value/EBITDA

D. Share price/free cash flow

3. An increase in inventory is

A. A use of Cash B. A source of cash C. No change in cash D. A decrease in Property, plant and equipment (PP&E)