13. You are getting ready to prepare pro forma statements for your business. Which one of the following are you most apt to estimate first as you begin this process? * * A) sales forecast B) fixed assets C) current expenses D) projected net income 14. The beta of the market __________ * A) is greater than 1 B) is less than 1 C) is 1 D) cannot be determined 15. If a firm has a debt-equity ratio of 1.0, then its total debt ratio must be which one of the following? * A) 2 B) 0.5 C) 1.5 D) 1 16. Unique Industries is investing in a new project. The minimum rate of return the firm requires on this project is referred to as the: * A) market rate of return B) internal rate of return C) cost of capital D) none of the above 17. The proposition that a firm borrows up to the point where the marginal benefit of the interest tax shield derived from increased debt is just equal to the marginal expense of the resulting increase in financial distress costs is called: * A) the static theory of capital structure B) M&M Proposition I C) M&M Proposition II D) the capital asset pricing model 18. If an employee deposits TK 20 at the end of each month into his company's plan which pays 6% interest compounded monthly, how much will he have in the account at the end of 5 years? * A) TK 1,301.01 B) TK 101.01 C) TK 112.74 D) TK 1,395.40 19. Dividend per share is equal to dividends paid: * A) divided by the par value of common stock. B) divided by the total number of shares outstanding. C) divided by total shareholders equity. D) multiplied by the par value of the common stock 20. Free cash flow is: * A) without cost to the firm. B) net income plus taxes. C) an increase in net working capital. D) cash that the firm is free to distribute to creditors and stockholders. 21. How much are you willing to pay for one share of Jumbo Trout stock if the company just paid a $0.70 annual dividend, the dividends increase by 1.6 percent annually, and you require a 10 percent rate of return? * A) $8.29 B) $8.33 C) $8.46 D) $8.53