15. A taxpaying, levered firm's optimal capital structure is the mixture of debt and equity financing that minimizes the weighted average cost of capital. T/F

18. A taxpaying, levered firm's optimal capital structure consists of equal amounts of debt and equity financing. T/F

23. According to M&M Proposition II, without taxes, the cost of equity for a firm is dependent upon which of the following? I. firm's cost of debt II. firm's capital structure III. size of the firm's earnings before interest and taxes IV. required rate of return on the firm's assets

25.

The level of financial risk to which a firm is exposed is dependent upon the firm's:

		debt-equity ratio.
		cost of equity financing.
		break-even level of earnings before interest and taxes.
		return on assets.
		level of earnings before interest and taxes.