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Which of statements is related to the hamada equation

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Reference no: EM132696772

Problem 1: Which of these statements is related to the Hamada Equation?

Select one:

a. The equity beta is a linear function of leverage.

b. Firm value decreases in the use of debt.

c. There is a unique, optimal amount of debt.

d. Firm value is unaffected by the use of debt.

Problem 2: For which of these industries would you expect the highest average leverage ratios, based on Australia data?

Select one:

a. Utilities

b. Materials

c. Information technology

d. Real estate

Reference no: EM132696772

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