A firm that is increasing its capital structure leverage and increasing profitability will likely experience a (an)   a. increasing value-to-book ratio     b. decreasing return on assets     c. volatile price-earnings ratio     d. None of these answer choices are correct.

Which statement below is incorrect? Select one: A. Compared to interview, survey is more suitable to ask standardised questions. B. If a firm has more intangible assets, according to the trade-off theory, it is more likely to have a higher leverage. C. If a firm is more profitable, according to the pecking order theory, it should use less debt for financing. D. The CAPM model implies that a stock with a higher beta has a higher return on average.

What types of firms would we expect to observe higher direct agency costs of equity, such as consuming excessive perquisites by management ?   Question 7 options:   a)  Firms with high free cash flows   b)  Firms with fewer growth opportunities   c)  Firms with weak governance structures   d)  All of the above options are correct   e)  None of the options are correct

Financial Leverage: a.can impact profitability. b.increases when stock is issued. c.is a sign of financial weakness. d.All of the above. e.None of the above.