1. Financial leverage impacts the performance of a firm by:
increasing the volatility of the firm's EBIT.
decreasing the volatility of the firm's EBIT.
decreasing the volatility of the firm's net income.
increasing the volatility of the firm's net income
lowering the firm's level of risk.
2. The value of a firm is maximized when the:
weighted average cost of capital is minimized.
levered cost of capital is maximized.
tax rate is zero.
cost of equity is maximized.
debt-equity ratio is minimized.