FIN 516 Week 8 Final Exam.

Course: FIN 516 Advanced Managerial Finance Institution: DeVry Contributor: Amanda Format: DOCX/PPTX Pages: 9

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Question 1 20 / 20 pts (CO B) Which of the following statements concerning MM extension with growth is not correct? 924560145531 The tax shields should be discounted at the cost of debt 924560149296 The value of a growing tax shield is > the value of a constant tax shield 924560149296 For a given D/S, the levered cost of equity > the levered cost of equity under MM's original (with tax) assumptions 923925159385 For a given D/S, the WACC is > the WACC under MM's original (with tax) assumptions 924560226695 The total value of the firm increases with the amount of debt Question 2

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