A company with low financial leverage, large reserve borrowing capacity and few profitable investment opportunities is likely to

Select one:

a. have a high cost of capital.

b. generate larger free cash flows.

c. generate smaller free cash flows.

d. have a high cost of debt.

For shares listed on the ASX an ex-dividend date is

Select one:

a. four business days after the record date

b. four business days before the record date

c. seven business days after the record date

d. seven business days before the record date

Which of the following statements is false?

Select one:

a. With all-equity companies, the rate of return to shareholders is always equal to the rate of return on assets.

b. With debt, the rate of return to shareholders is always equal to the rate of return on assets providing the rate of return on assets is equal to the interest rate.

c. If the rate of return on assets is greater than the interest on debt, then leverage results in lower rates of return on equity.

d. If the rate of return on assets is less than the interest rate on debt, then leverage results in lower rates of return on equity.