#1 Finding the present value of future cash flows is called _______, and finding the future value of present cash flows is called _______.

• A. capital budgeting, short-term budgeting
• B. financial ratio analysis, financial statement analysis
• C. discounting, compounding
• D. Grindcore, K-Pop

#2

Which of these is the most expensive source of capital?

• A. internally generated equity
• B. preferred stock
• C. debt
• D. new-issue common stock

#3 The optimal capital structure for a company is the combination of debt and equity that maximizes the weighted average cost of capital.

• A. True
• B. False