41) Debt ratio Interest -bearing debt ratio Times interest earned ratio EBITDA coverage ratio Waltham Watch Firms 33% 42% 19% Comparable 25 23 20 4 From the table above we can conclude prigo A) Waltham has a conservative capital structure policies. B) Waltham uses more leverage than the typical firm in its industry. C) Waltham's EPS would be more sensitive than a typical firm's to changes in EBIT. D) Waltham has too much debt.

From the table above we can conclude A) Waltham has a conservative capital structure policies. B) Waltham uses more leverage than the typical firm in its industry. C) Waltham's EPS would be more sensitive than a typical firm's to changes in EBIT. D) Waltham has too much debt. 43) The capital structure that minimizes the weighted average cost of capital will also A) minimize bankruptcy costs. B) maximize the price per share of common stock. C) minimize the value of the firm. D) maximize EPS for any given level of EBIT. 50) If dividends and capital gains are taxed at the same rate, should investors prefer cash dividends or stock repurchases? A) They would prefer to have neither a dividend nor a stock repurchase. B) It would not matter. Either cash dividends or stock repurchases would result in the same after-tax cash flow. C) They should prefer stock repurchases to cash dividends. D) They should prefer cash dividends to stock repurchases. 51) Chandler Corporation has 1 million shares outstanding. The current price per share is $20. If the company decides to use $2 million dollars to repurchase shares at the market price, the company will have shares outstanding worth approximately Assume that the price does not change during the repurchase period. A) 900,000,$20 per share (B) 1,000,000,$18 per share C) 1,000,000,$20 per share D) 900,000,$22.22 per share