Firms have three sources of common equity, retained earnings, new stock issues, and new bond issues.
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Q3: Firm value is calculated by adding expected
Q4: The cost of debt represents the minimum
Q5: The minimum required rate of return is
Q6: The ratio of debt to stock market
Q7: The cost of capital should be estimated
Q9: Repurchasing common stock decreases a firm's debt
Q10: The firm's unadjusted cost of debt financing
Q11: A lower weighted average cost of capital
Q12: The firm's optimum debt/equity mix maximizes the
Q13: A nonoptimal capital structure may lead the
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