3. 3.1. 3.2. 3.3. 3.4. 3.5. 3.6. 3.7. Fill the Blank Questions (21pts, each question is worth 3pts) issued. cash flow. is the cost of capital at which two projects' NPVs are equal. is used to quantify the increased cost of equity due to financial leverage. is the amount of capital raised beyond which new common stock must be from inflation. is the weighted average of the time it takes to receive each of the bond's that has interest payments based on an inflation index so as to protect the holder is a risk analysis technique in which probable future events are simulated on a computer, generating estimated rates of return and risk indexes is the capital structure theory that states the sequence in which firms prefer to raise capital: first spontaneous credit, then retained earnings, then other debt, and finally new common stock.