FIN 370 Final Exam Newest Version New (FIN 370 Final Exam Newest Version-New)

FIN 370 Final Exam Newest Version-New 1. Capital Structure Theory in general assumes that: A firm's value is determined by capitalizing (discounting) the firm's expected net income by the firm's cost of equity. A firm's cost of capital rises as a firm uses more financial leverage. A firm's value is determined by discounting the firm's expected cash flows by the WACC. A firm's cash flows will grow indefinitely at a constant rate. 2. Which of the following financial ratios is the best measu...