Your Firm Is Currently 100% Equity Financed

question 35

Multiple Choice

Your firm is currently 100% equity financed. The CFO is considering a recapitalization plan under which the firm would issue long-term debt with a yield of 9% and use the proceeds to repurchase some of its common stock. The recapitalization would not change the company's total assets, nor would it affect the firm's basic earning power, which is 15%. The CFO believes that this recapitalization would reduce the firm's WACC and increase its stock price. Which of the following would be likely to occur if the company goes ahead with the recapitalization plan?

• A) The company's net income would increase.
• B) The company's earnings per share would decline.
• C) The company's cost of equity would increase.
• D) The company's ROA would increase.
• E) The company's ROE would decline.

Differentiate between various diagnostic processes and the importance of accurate diagnosis.

Recognize the role of assumptions, beliefs, and practices in patient care.

Understand safety precautions necessary in a medical setting to prevent the spread of infection.

Understand the principles of respiratory hygiene and cough etiquette.

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Definitions:

Psychosurgery

Surgical operations on the brain intended to relieve severe mental disorders.

Cingulotomy

A neurosurgical procedure that targets the cingulate gyrus to treat certain mental disorders, such as severe depression and obsessive-compulsive disorder.

Bilateral Lobotomy

A surgical procedure that involves severing connections in the brain's prefrontal lobe, historically used to treat mental illness with often debilitating results.

Time Outs

A disciplinary technique used to remove an individual from an environment for a period of time as a consequence for unacceptable behavior, with the goal of decreasing that behavior.