9 The few's target capital structure should do which of the following? its-tanFoods has a capital structure of 40% debt and 60% equity, itstax rate is 35%, and d no debBased on the Hamada equation, what would the firm's beta be if thhchest ossible bond rating the weighted average cost of capital (WACC) unlevered beta, b.? ie, what is its a 0.71 b, 075 d 083 e o8z laptop computer. The issue now is how to finance the company, with only equity or w mix of debt and equity. Ex shown below. with a a for the firm are 21. You work for the CEO of a new company that plans to manufacture and sell a rn How much higher or lower will the firm's expected EPS be if it uses some det rather than only equity, ie, what is EPS- EPS. 60% Debt,L $600,000 0% Debt, U $600,000 $2,500,000 0.0% $0.00 $2,500,000 250,000 NA 35% Oper. income (EBIT) ired investment 60.0% $1,500,000 $1,000,000 100,000 1 0.00% 35% 5 of Debt 5 of Common equity Shares issued, $10/share Interest rate Tax rate a $1.00 c. $1.23 d. $1.37 e. My calculation is: $ 22. A firm that follows an aggressive working capital financing approach uses primarily short- term credit and thus is more exposed to an unexpected increase in interest rates than is a firm that uses long-term capital and thus a. True follows a conservative financing policy. b. False The cash conversion cycle (CCC) combines three factors: The inventory conversion period, the receivables collection period, and the payables deferral period, and its purpose is to show how long a firm must finance its working capital. The shorter the CCC, the less effective the firm's working capital management. 23. a. True b. False 24. Other things held constant, which of the following will cause an increase in net working capital? a. Cash is used to buy marketable securities. b. A cash dividend is declared and paid. c. Merchandise is sold at a profit, but the sale is on credit. d. Long-term bonds are retired with the proceeds of a preferred stock issue. e. Missing inventory is written off against retained earnings