12.Which of the following statements is NOT correct?

	New common stock is typically the most expensive form of equity, followed by retained earnings and then preferred stock.
	The before-tax cost of debt is used as the component cost of debt for purposes of developing the firm's weighted average cost of capital.
	In practice, most firms operate under conditions of capital rationing because they have more acceptable independent projects than they can fund.
	The capital structure that minimizes a firm's weighted average cost of capital also maximizes its stock price.

17. Which of the following statements is correct?

	The operating breakeven point is the level of sales necessary to cover all operating costs; the point at which net income = 0.
	Opportunity costs should NOT be included in a project's incremental cash flows.
	Cash dividends cause a decrease in retained earnings, and hence in overall stockholders' equity.
	If a project's internal rate of return (IRR) exceeds the cost of capital, then the project's net present value (NPV) must be negative.

19. Which of the following statements is NOT correct?

	The installed cost of a new asset is the cost of a new asset plus its installation costs.
	The book value of an asset is calculated by subtracting its accumulated depreciation from its installed cost.
	The change in net working capital is the difference between a change in current assets and a change in current liabilities.
	When we calculate the terminal cash flow, we need to subtract the change in net working capital because it is a cash outflow and the need for the decreased net working capital investment is assumed to end.

24. The purpose of a reverse stock split is to ______.

	increase the price of a stock
	issue additional shares
	reduce the price of a stock
	increase the dividend