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1. Explain why determining a firm's optimum debt-to-equity mix is important. 2. Describe how a firm's business risk can be measured and indicate how operating

1. Explain why determining a firm's optimum debt-to-equity mix is important.

2. Describe how a firm's business risk can be measured and indicate how operating leverage impacts business risk.

3. What is the weighted average cost of capital (WACC)? Describe how it is calculated.

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