b. Using retained earnings c. Both a and b above 39. If the value of operations - free cash flows x (1+the growth rate in the free cash flows) divided by the firm's weighted average cost of capital minus the growth rate in the free cash flows, or V = FCF(1 + g)(WACC-g) where FCF-$400,000 g 5% -12% value of operations equals: WACC then the a. S10 million b. $6 million c. $4 million 40. If the value of operations free cash flows x (1+ the growth rate in the free cash flows) divided by the firm's weighted average cost of capital minus the growth rate in the free cash flows, or V-FCF+g)/(WACC-g) where FCF S200,000 g 6% WACC 10% then the value of operations equals: a. $4.2 million b. $5.0 million c. S4.3 million 41. Financial managers can directly affect the value of a corporation by: a. Reducing the amount of debt in the capital structure b. Reducing the amount of preferred stock in the capital structure c. Reducing the WACC by targeting the optimal capital structure 42. The mix of debt and equity that maximizes the stock price is the optimal: a. Cost of capital b. Capital structure c. Operating leverage