Examen 2. Etapa 2 Corporate Finance

Compared with the simple payback period, the discounted payback period most accurately:

The ability to expand a project if demand turns out better than expected is an example of:

Two projects are mutually exclusive when:

A company would use land it already owns for a new project. The land could be sold today for $200,000. In the project analysis, that $200,000 most accurately:

The profitability index (PI) of a project is most accurately defined as:

A firm’s financial risk, as distinct from business risk, most accurately arises from:

Without taxes, a firm has an unlevered cost of capital (r0) of 10%, a cost of debt of 6%, and a debt/equity (D/E) ratio of 0.5. Under MM II, its cost of equity is approximately:

An example of an INDIRECT cost of financial distress is most likely:

Under signaling theory, a company’s announcement of an issue of new shares is usually interpreted by the market as a signal that is:

A firm’s optimal capital structure is most accurately associated with the level of leverage that:

If a company increases its leverage to the point of triggering a downgrade of its credit rating, its cost of debt most likely:

Compared with a B2C (business-to-consumer) model, a B2B (business-to-business) model is most likely characterized by:

A ‘razor-and-blades’ revenue model most accurately consists of:

An ‘asset-light’ business model, relative to an ‘asset-heavy’ one, is most accurately characterized by:

The scalability of a business model most accurately refers to the ability to:

In investment analysis, to be consistent, NOMINAL cash flows should most accurately be discounted with:

When setting its capital structure, a firm most accurately should consider that creditors, relative to shareholders:

‘Dynamic pricing’ in a business model most accurately consists of:

A licensing revenue model most accurately generates revenue through:

Capital rationing occurs when a firm: