Question 11 3 pts Which is CORRECT? the risk-free rate can be lowered by efficient managers O market risk premium may be negotiated flotation (transaction) expenses can be avoided by using internal funds O Use of Suppliers' credits lower WACC Question 12 3 pts At the OPTIMUM capital structure: WACC VOPERATIONS Quincy maximum minimum Quito maximum maximum Quadir minimum maximum Quaser minimum minimum O Quincy O Quito O Quadir O Quaser Question 13 3 pts What's RIGHT? O Firms with higher business risk may prefer higher financial risk Firms with highr business risk may prefer low financial risk Firms with low business risk chooses to avoid financial risk altogether Firms with low business risk can only afford to take a low financial risk Question 14 3 pts The optimum capital structure is attained at a debt equity ratio where Additional Value added by the Debt Tax shelter is [choose: = or ] Additional Value Reduced by Bankruptcy related costs O > O Question 15 3 pts When firms issue new stocks Investors are more likely to assume that stocks are Undervalued, i.e., intrinsic value > the stock price O Overvalued, i.e., intrinsic value