QUIZ

True or False
Operating Leverage results in magnification in
EPS in relation to EBIT because of fixed interest
bearing sources of funds.
 Fill in the blanks
Combined Leverage is equal to :

(% Change in EBIT/% Change in_______) *

(%Change in _____/% Change in EBIT).
 True or False
The firm can take advantage of financial leverage
when there is a recession in the market.
 Fill in the blanks
Cost of Equity is equal to :

_______ + B ( RM -- ________)
 Fill in the blanks
Cost of equity is calculated throught a popular
model known as ________________________.
 Fill in the blanks
Beta is a measure of ______________________.
 True of False
Weighted Average Cost of Capital (WACC) is used
to calculate the value of the firm.
 True or False
A firm can take debt double to the size of equity.
 True or False
Depreciation is an outflow of cash.