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__________ is the return to investors divided by total assets.

Select one:

a. Return on investment

b. Return on average assets

c. Return on assets

d. Return on risk

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Which form of payment causes a company to pay taxes twice on the same amount?

Select one:

a. Dividends

b. Interest

c. Stock splits

d. Net present value

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Which of the following is not an assumption in capital structure theory?

Select one:

a. Potential investors carry the same assumptions about a company's risks.

b. Companies can measure business risk.

c. Investors trade stocks and bonds in perfect capital markets.

d. All the above are assumptions in capital structure theory.

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A company is evaluating its options for filing bankruptcy and needs to determine the total costs it would incur as a result of being in distress. Below is a summary of the information for this scenario: Filing fees equal $100. Creditor-revised terms would increase the financing costs of the company by 2% upward on the existing $1,000 floating credit facility annually. Expected loss in customer sales equals $30 annually. What is the company's total cost to choose bankruptcy?

Select one:

a. $100 annually

b. $150 annually

c. $300 annually

d. $500 annually