"custer's has bonds outstanding with a face value of $162,000 that are selling at par. it also has 10,000 shares of stock outstanding that are selling for $32.30 a share. the all-equity value of the firm is $455,000. the tax rate is 35 percent. by what amount has the value of the firm been decreased by the expected bankruptcy costs? assume there are no other claims on the firm. a. $11,300b. $18,600c. $26,700d. $0e. $30,000

What are the general categories of capital budget scenarios? describe the overall decision-making context for each.

Security a has a higher standard deviation of returns than security b. we would expect that: (i) security a would have a risk premium equal to security b. (ii) the likely range of returns for security a in any given year would be higher than the likely range of returns for security b. (iii) the sharpe ratio of a will be higher than the sharpe ratio of b. (a) i only (b) i and ii only (c) ii and iii only (d) i, ii and iii

Royal motor corp. generates a major portion of its revenues by manufacturing luxury sports cars. however, the company also derives an insignificant percent of its annual revenues by selling its sports merchandise that includes apparel, shoes, and other accessories under the same brand name. which of the following terms best describes royal motor corp.? a. aconglomerate b. a subsidiary c. adominant-businessfirm d. a single-business firm