Solution:
Set of projects or set of investments usually maximize firm value is classified as optimal capital budget. An optimal capital structure is the objectively best mix of debt, preferred stock, and common stock that maximizes a company's market value while minimizing its cost of capital.

Solution:
The Financial Leverage (FL) measures the relationship between the EBIT and the EPS and it reflects the effect of change in EBIT on the level of EPS. The FL measures the responsiveness of the EPS to a change in EBIT and is defined as the % change in EPS divided by the % change in EBIT. Symbolically, = Increase in EPS ¸EPS/Increase in EBIT¸EBIT

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Solution:
Dividend yield = Dividend paid / Current price * 100 = 20 / 50 * 100 = 40.00%

Solution:
In Corporation characteristics, losses are subject to funds invested actually is considered as limited liability. Limited liability is a type of legal structure for an organization where a corporate loss will not exceed the amount invested in a partnership or limited liability company. In other words, investors' and owners' private assets are not at risk if the company fails.

Solution:
In investment returns, a received amount is subtracted from an invested amount which is used to calculate dollar return. The dollar amount of the rate of return over a given period of time.

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