1. Discuss the assumptions of the capital asset pricing model (CAPM) and the degree to which they apply to family firms. 2. What is family equity? How is it distinct from private and public equity? 3. What does the empirical evidence say about the financial performance of family and nonfamily firms? 4. Are family firms more risk averse than nonfamily firms? 5. What are the advantages and disadvantages of debt financing? 6. Why do family firms typically have a lower cost of debt financing? 7. Explain the differences between the capital market line (CML) and the family market line (FML). 8. What are the risks associated with applying a lower than risk equivalent cost of equity capital? 9. Under which conditions does it pay for the owners to increase the firm's leverage? 10. How do the leverage levels of family firms compare to those of nonfamily firms?