Before selling bonds to investors, Matteo's company must provide audited financial statements and a detailed description of the terms of the bonds. By doing so, which federal regulation is he complying with?

• Securities Act of 1933

• Securities Act Amendments of 1975

• Securities Exchange Act of 1934

• Sarbanes-Oxley Act of 2002

A social media start-up wants to raise funds to support growth by offering shares to a select group of investors. What type of market transaction should they pursue?

• Secondary market offering

• Private placement

• IPO

• Share buyback

Based solely on their current weighted average cost of capital, which company should pursue an investment opportunity with an expected return of 6.5%?

Company A	Company B
Market Value of Equity	$400,000	$600,000
Market Value of Debt	$100,000	$800,000
Cost of Equity	9%	9%
Cost of Debt	3%	4%
Tax Rate	35%	35%

• Neither Company A nor Company B

• Only Company B

• Only Company A

• Both Company A and Company B

A company is considering a new plan for its capital structure. Which of the following is true if, under the new plan, the company's weighted average cost of capital exceeds the expected return?

• The company's value will increase.

• The company is over-leveraged.

• The company's proposed capital structure may put it at risk for bankruptcy.

• The company's cost of capital is still at a comfortable level.