Q-1 The break-even model enables the manager of the firm to:

a) set appropriate equilibrium thresholds

b) calculate the minimum price of ordinary shares for certain situations

c) determine the quantity of output that must be sold to cover all operating costs

d) determine the optimal amount of debt financing to use

Q-2 Which of the following is true regarding the use of the companys weighted average cost of capital (WACC) as the discount rate for new projects?

a) The risk of the project should resemble the risk of the overall company

b) The WACC should be based on book values of debt and equity

c) The cost of debt should always be after-tax and you should use market yields rather than the interest rate at which the debt was issued

d) In financing new projects the company intends to change its target capital structure

Kindly help me by choosing the correct answer for two MCQ. Answer should be A B C D