FIN571 Limits to the Use of Debt Distinguish between direct and indirect costs in a corporate bankruptcy

Answer the 9 questions below, each question must be a minimum of 150-200 words. Must be in APA format, please identify the questions on paper. Cannot accept more than 5% plagiarism, it will be submitted to TurnItIn.

Must be answered in your own words, NO cut and pasted phrases or paragraphs — you can include the URL address so we can click and go to the site, but do not copy and paste (even with references and citations). This way we can avoid plagiarism as well as copyright issues.

BOOK: Ross, S., Westerfield, R., Jaffe, J. & Jordan, B. (2016). Corporate finance (11th edition). New York, N.Y. McGraw-Hill Education.

Ch. 14: Efficient Capital Markets and Behavior Challenges

1. Describe an efficient capital market for stocks.
2. Compare and contrast the weak form of market efficiency with the strong and semi-strong forms.
3. Explain the relevance of market efficiency for financial managers.

Ch. 16: Capital Structure ? Basic Concepts

1. Distinguish how maximizing the value of the corporation differs from maximizing shareholder interests.
2. Explain how leverage can improve returns to the shareholders.
3. Describe the impact of corporate taxes on the weighted average cost of capital.

Ch. 17: Capital Structure ? Limits to the Use of Debt

1. Distinguish between direct and indirect costs in a corporate bankruptcy.
2. Describe agency costs and the impact on bondholders.
3. Explain the application and implications of the pecking-order theory.