Which one of the following possible characteristics of a bond would require a higher coupon rate? Protective covenants O Convertibility O Attached warrants O Call provision A firm is considering a stock buyback or an equal amount of a cash dividend. Which one of the following is not true when comparing the impact of the two ? The firm's remaining shareholders will have lower immediate tax liability with the stock buyback. The short-term stock price will be higher in the short run with the buyback. The earnings per share will be higher in the short-run with the stock buyback. The firm will have a higher cash balance after the share buyback. What is another name for an unsecured bond? collateral O sinking fund debenture O indenture warrant Restriction on dividends, restriction on additional debt, requirements that certain values on selected financial ratios are maintained, prohibitions against mergers, etc. are all examples of sinking funds O protective covenants indentures conversions financial analysis tools What did Modigliani and Miller find when they assumed taxes but no bankruptcy costs? Firm value decreases with more debt. Firm value increases with more debt Firm value is unaffected by the amount of debt used to finance the firm. The u-shaped cost of capital with a unique percentage of debt financing that minimizes the WACC and maximizes firm value. What did Modigliani and Miller find when they assumed no taxes and no bankruptcy costs? Firm value decreases with more debt. The u-shaped cost of capital with a unique percentage of debt financing that minimizes the WACC and maximizes firm value. Firm value increases with more debt Firm value is unaffected by the amount of debt used to finance the firm, What did Modigliani and Miller find when they assumed taxes and bankruptcy costs? Firm value increases with more debt O Firm value is unaffected by the amount of debt used to finance the firm. The u-shaped cost of capital with a unique percentage of debt financing that minimizes the WACC and maximizes firm value. Firm value decreases with more debt