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NEW QUESTION: 1
Which of the following statements is most correct?
A. If the after-tax cost of equity financing exceeds the after-tax cost of debt financing, firms are always able to reduce their WACC by increasing the amount of debt in their capital structure.
B. Increasing the amount of debt in a firm's capital structure is likely to increase the cost of both debt and equity financing.
C. The optimal capital structure maximizes EPS.
D. All of these answers are correct.
E. The optimal capital structure minimizes the cost of equity.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
Increases in the debt ratio increase the cost of both debt and equity. Bondholders recognize that firms with higher debt levels are more likely to experience financial problems, which will explain why increases in the debt ratio raise the cost of debt. Concerning the cost of equity, the business risk premium, in the required rate of return equation, does not depend on the debt level. It will remain constant at all debt levels.
However, the financial risk premium does vary depending on the debt level; the higher the debt level, the greater the risk premium, and therefore the higher the cost of equity.

NEW QUESTION: 2
Logging profiles are assigned to?
A. Web applications
B. Attack signatures
C. HTTP class
D. Security policies
Answer: A

NEW QUESTION: 3
You have a Project Server 2007 environment and a Project Portfolio Server 2007 environment connected through the Project Portfolio Server Gateway. You are upgrading the Project Server 2007 environment to Project Server 2010. You need to upgrade to Project Server 2010 and continue tracking business drivers, driver prioritization, and portfolio optimization in Project Server 2010. What should you do?
A. Create a Portfolio Optimizer view in Project Web App (PWA).
B. Create a Portfolio Analysis Project Selection view in Project Web App (PWA).
C. Migrate the Project Portfolio Server 2007 data to Project Server 2010.
D. Run Project Portfolio Server 2007 and Project Server 2010 and disable the Project Portfolio Server Gateway.
Answer: C

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