1. The combination of debt and equity used to finance a firm is known as _____.?
a. ?the capital structure
b. ?the trade-off theory
c. ?syndication
d. ?capital budgeting
e. ?securitization
2. Why do most business executives believe it is more difficult to do competitive analysis in today’s market than it was a decade or two ago? Explain in terms of the six forces of competition.
3. “The Tiger Shark” promises to lend you money on a “three-for-four” weekly basis, i.e., for every $3 it lends you today, you have to repay $4 one week from now. What is the true (effective) yearly rate of this loan? Assume that each year has exactly 52 weeks.