A security that falls above the security market line is __________.

• over-valued for its level of risk

• attractive for a company raising capital

• attractive for an investor

• correctly valued for its level of risk

Select the true statement about the bankruptcy process.

• Companies that reorganize under Chapter 11 are guaranteed a lower cost of capital in the future.

• A company must still pay its debts on time while in bankruptcy.

• A Chapter 7 bankruptcy is the least common form of bankruptcy for businesses.

• A Chapter 11 bankruptcy can be quite complicated and can take a long time to complete.