The optimal firm value is achieved when the

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Reference no: EM131932816

1. The optimal firm value is achieved when the:

a) Present value of the bankruptcy cost is minimized.

b) The interest tax shield on debt is maximized.

c) Weighted average cost of capital is minimized.

d) Debt-equity ratio is maximized.

e) Total net gain from leverage is equal to zero.

2. If the stock market is weak form efficient, then an investor can NOT earn excess profits by:

a) Trading on insider information.

b) Trading on newly released public information.

c) Identifying mispriced securities.

d) Studying historical price patterns.

e) Studying financial statements as they become available.

Reference no: EM131932816

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