& Agency theory examines the relationship between the A shareholders of the firm and the firm's investment banker. Bowners of the firm and the managers of the firm. C board of directors and large institutional investors D. Shareholders and the firm's transfer agent 9. Indetermining the cost of retained carnings A. the dividend valuation model is inappropriate. B flotation costs are included. C. growth is not considered D. the capital asset pricing model can be used. 10. The mix of debt and equity capital for a firm is referred to as the firm's A. working capital management Bcash management. C.capital budgeting. D. capital structure 11. The process of valuing an investment by determining the present value of its future cash flows is called: A. the constant dividend growth model. B discounted cash flow valuation Cthe Capital Asset Pricing Model D. all the above 12. The first step in the capital budgeting process is A. collection of data. B. idea development C. assign probabilities. D. determine cashflow. 13. The difference between an investment's market value and its cost is the: A not present value. B. internal rate of return C.payback period D.none of the above. 14. How is an annuity due defined? A. a stream of cash flows occurring for less than one year B. set of equal cash flows occurring at the beginning of each period C. an annuity stream of payments that are disbursed rather than received D. All the above 15. A characteristic of capital budgeting is A. a large amount of money is always involved. B. the internal rate of return must be less than the cost of capital. C. the internal rate of return must be greater than the cost of capital D. the time horizon is at least five years. Dividend yield