Shareholders can attempt to overcome managerial agency problems A. Incurring monitoring expenditures. B. Relying on market discipline such as hostile takeovers. C. Using specialized compensation contracts. D. All of the above. E. None of the above. Firms can alter their capital structure by: A. Not accepting any capital budgeting projects. B. Investing in non-tangible assets. C. Becoming a limited liability company. D. Issuing stock to repay debt. E. All of the above 7. The steps involved in any capital budgeting process include: A. Evaluating projects. B. Deciding which projects to undertake. C. Identifying ideas for new investment projects. D. All of the above. E. None of the above. 8. Which of the following may be appropriate corporate goals. A. Increase market share. B. Minimize costs. C. Underprice any competitors. D. Expand profits. E. None of the above. Which of the following are considered financial markets? A. The stock and bond markets. B. Foreign-exchange markets. C. Derivative markets. D. Commodities markets. E. All of the above. 10. Firms issue securities or financial instruments (or claims) to raise capital. These claims are classified as: A. Stocks or bonds. B. Debt or equity. C. Contigent claims on the value of the firm. D. All of the above. E. None of the above. 11. Which of the following statements regarding financial markets and securities is the most accurate? A. Debt represents an ownership interest in the firm. B. Trades of securities in the secondary market raise additional funds for corporations. C. Trades in the primary market are between issuing corporations and investors. D. More stock than bond transactions occur in the primary market. E. U.S. security issuers account for only a small portion of worldwide issues. 12. Which of the following factors influences a firm's cost of capital? A. The degree of risk in the projects it undertakes. B. The types of funds it raises. C. Interest rates. D. Taxation policies. E. All of the above