Student ID. No. 2a Part I. Multiple Choice questions (2.8 Points each) 1. The coupon rate is used to calculate the bond's interest amount, while the yield is us calculate the present value of both the interest amount and principal amount of the bon a. True b. False 2. In estimating the market value of a bond, the coupon rate should be used as the discoun a. True b. False 3. The prices of financial assets are based on the expected value of future cash flows, the rate, and past dividends. a. True b. False 4. Retained eanings represent an internal source of funds that is raised without the paym interest or cost to the firm's stockholders. a. True b. False 5. The use of the optimum capital structure minimizes the cost of capital. a. True b. False 6. The discount rate that equates a future stream of expected dividends to the current pric good approximation of the cost of common stock. a. True b. False 7. The cost of debt is equal to the current bond yield on bonds of similar risk class, adjust corporate tax rate. a. True b. False