An investor will short a stock when: A. the price is currently too high. B. the price is currently too C. the price is expected to increase. D. the price is expected to decrease. When comparing leveraged vs. unleveraged capital structures, leverage works to increase EPS for high levels of EBIT because: A. interest payments on the debt vary with EBIT levels. B. interest payments on the debt stay fixed, leaving less income to be distributed over fewer shares. C. interest payments on the debt stay fixed, leaving more income to be distributed over fewer shares. D. interest payments on the debt stay fixed, leaving less income to be distributed over more shares. E. interest payments on the debt stay fixed, leaving more income to be distributed over more shares. Financial leverage impacts the performance of the firm by: A. maintaining the same level of volatility of the firm's EBIT. B. decreasing the volatility of the firm's EBIT. C. decreasing the volatility of the firm's EPS. D. increasing the volatility of the firm's EPS. E. None of the above. MM Proposition l with corporate taxes states that: A. capital structure can affect firm value. B. by raising the debt-to-equity ratio, the firm can lower its taxes and thereby increase its total value. C. firm value is maximized at an all debt capital structure. D. All of the above. E. None of the above. A firm should select the capital structure which: A. produces the highest cost of capital. B. maximizes the value of the firm. C. minimizes taxes. D. is fully unlevered. E. has no debt