Which of the following best describes a best efforts underwiting commitment? If the entire issue cannot be sold at the offering price, the deal is called off and the issuing company receives nothing Underwriter is only responsible for half of the issue Underwriter commits to selling as much of the issue as possible at the agreed-on offering price but can return any unsold shares to the issuer without inancial responsblity The underriter agrees to buy the eire issue and assume fuil financial responsibility for any unsold shares Free Cash Flow Growth rate 100 Cost of Capital Debt4o-total value 50% Given the data in the above table, what is the present value of the business today lusing the growing perpetuity formula)? 3000 3356 3400 3600 100,000 Debt Discount Rate Enterprise Value Perpetual Growth Rate 500,000 4% Given the data in the above table, cakculate market capitalization of this hypotheticall company 100,000 5400,000 540,000 4 Cost of Equity After-tax cost of debt Debt-to-equity ratio 1.5 Gliven the data in the above table, what is the cost of capital of this company? 4.0% 3.7% 62% 5.9% 5 Suppose a company with a very high risk tolerance is debating over which capital structure to implement. Which of the following, all else being equal, capital structure will lead to the highest return on equity? 30% Debt, 70% Equty 50% Debt, 50% Equity 90% Debt 10% Equity 20% Debt, 80% Equity 6 Which of the following statements is correct? Financial buyers are operating partners that try to create synergies Financial buyers are institutions that provide capital and are not operators Strategic buyers are asset managers that are trying to time the purchase or sale of a business Strategic buyers are institutions that provide capital and are not operators 7 Which of the following is the correct ordering of the capital stack (from most secure to least secure)? Subordinated debt > Senior debt> Equity Equity >Subordinated debt->Senior debt Senior debt >Equity>Subordinated debt Senior debt > Subordinated debt-> Equity 8 Which of the following debt repayment profiles involves a growing principal amount over time? Senior Debt Pay in kind debt Equity Mezzanine finance 9 Which of the following would NOT be a sufficient cash flow measure to assess debt capacity? Senior Debt/EBITDA Total Debt/EBITDA EV/EBITDA Cash interest cover 10 Which of the following is NOT a form of subordinated debt? High yield bonds Vendor Notes Revolver Payment-In-Kind Notes