[6] The optimal capital structure of a firm: [A] will remain constant over time unless the firm makes an acquisition. [B] will be the same for all firms in the same industry. [C] will vary over time as taxes and market conditions change. [7] In a world with corporate taxes, MM theory implies that that all firms should choose an all-debt capital structure. [A] True [B] False [8] A firm is technically insolvent when: [A] the value of its stock declines by more than 50 percent in any given 12-month period. [B] the value of the firm's assets is less than the value of the firm's liabilities. [C] it is unable to meet its financial obligations. [9] Which one of the following statements is correct concerning a Chapter 7 bankruptcy? [A] A firm reorganizes its operations in an effort to return to being a viable concern. [B] A trustee will assume control of the firm's assets until those assets can be liquidated. [10] If the net present value of a project is positive (non-zero), then the project's internal rate of return will exceed its required rate of return. [A] True [B] False