You are analyzing two firms (U and L) that are identical except that firm U uses only equity to finance its assets and firm L uses 50% debt and 50% equity to finance its assets. Which of the following statements about U and L are true: Multiple Choice O O Operating cash flows are unaffected by the choice of leverage for a firm. Firm L will have higher operating cash flow than firm U due to the tax shield of debt Firm U will have higher operating cash flow than firm L due to the amount of taxes paid on debt by firm L Firm L and Firm U will have identical operating cash flows.

You ore onolyzing two firms (U and L, that are identical except that firm U uses only equiry to finance its assets and firm L uses 50% debt and 50% equity to finance its assets. Which of the following statements about U and L are true: Multiple Choice Oporating cast flows ore unafiected by the choice of lewerege for a firm Fim L will have higher operating cosh flow than firm U due to the tak shield of debt Firm U withove bigher opersting cash flow than firm L due to the amount of taxes paid on debt by fam L Frm L and fiem U wit heve dernicoloperating cash flows You ore onolyzing two firms (U and L, that are identical except that firm U uses only equiry to finance its assets and firm L uses 50% debt and 50% equity to finance its assets. Which of the following statements about U and L are true: Multiple Choice Oporating cast flows ore unafiected by the choice of lewerege for a firm Fim L will have higher operating cosh flow than firm U due to the tak shield of debt Firm U withove bigher opersting cash flow than firm L due to the amount of taxes paid on debt by fam L Frm L and fiem U wit heve dernicoloperating cash flows