1. The optimal capital structure can be found at:

   		where the corporate cost of capital is maximized
   		100% debt
   		100% equity
   		where the corporate cost of capital is minimized

1. Which of the following statements is the least correct?

   		the disadvantage of financial leverage is that it increases the probability of bankruptcy
   		for-profit firms have greater access to capital than not-for-profit firms
   		if the marginal benefit of debt is less than the marginal cost of debt then the firm should add more debt financing
   		the benefit of financial leverage is that it reduces the taxable income and tax liability