(A) 0
(B) 1
(C) positive
(D) negative

(A) cash inflow – cash outflow
(B) cash outflow – cash inflow
(C) PV of cash inflow – PV of cash outflow
(D) PV of cash outflow – PV of cash inflow

(A) perpetuity
(B) dividend
(C) liquidity
(D) annuity

(A) risk premium
(B) risk free rate
(C) option value
(D) arbitrage

(A) to maximize the profit of the shareholders
(B) to maximize the value of the corporation
(C) both A and B
(D) to take care of the interests of the management

(A) Repurchases are more flexible
(B) Repurchases are tax-advantaged
(C) both A and B
(D) none of these

(A) paying cash dividends
(B) stock repurchase
(C) both A and B
(D) none of these

(A) Borrowing is not a good idea in this case
(B) No difference who (firm or shareholders) borrows
(C) It is better that the firm borrows
(D) It is better that the shareholders borrow

(A) levered equity
(B) unlevered equity
(C) both levered and unlevered
(D) bond equity

(A) $105
(B) $107.5
(C) $110.25
(D) $95