Chapter 18
Valuation and Capital Budgeting for the Levered Firm
Multiple Choice Questions
1. The flow-to-equity (FTE) approach in capital budgeting is defined to be the:
A. discounting all cash flows from a project at the overall cost of capital.视频英文怎么说
B. scale enhancing discount process.
C. discounting of the levered cash flows to the equity holders for a project at the required return on equity.
D. dividends and capital gains that may flow to a shareholders of any firm.
E. discounting of the unlevered cash flows of a project from a levered firm at the WACC.
2. The acronym APV stands for:
面试客服自我介绍A. applied prent value.
B. all purpo variable.
C. accepted project verified.
目录设置D. adjusted prent value.
E. applied projected value.
3. A leveraged buyout (LBO) is when a firm is acquired by:
A. a small group of management with equity financing.
空调选用B. a small group of equity investors financing the majority of the price by debt.
C. any group of equity investors when the majority is financed with preferred stock.
D. any group of investors for the asts of the corporation.
儿童生日派对E. None of the above.
4. Discounting the unlevered after tax cash flows by the _____ minus the ______ yields the ________.
A. cost of capital for the unlevered firm; initial investment; adjusted prent value.
B. cost of equity capital; initial investment; project NPV.
C. weighted cost of capital; fractional equity investment; project NPV.
D. cost of capital for the unlevered firm; initial investment; all-equity net prent value.
E. None of the above.
砍价
5. The acceptance of a capital budgeting project is usually evaluated on its own merits. That is, capital budgeting decisions are treated parately from capital structure decisions. In reality, the decisions may be highly interwoven. This may result in: 马油的功效
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