CHAPTER 17CHAPTER 17Financial Leverage and Capital Structure PolicyI.DEFINITIONSHOMEMADE LEVERAGEa1.The use of personal borrowing to change the overall amount of financial leverage to which an individual is exposed is called:a.homemade leverage.b.dividend recapture.c.the weighted average cost of capital.d.private debt placement.e.personal offset.M&M PROPOSITION Ib2.The proposition that the value of the firm is independent of its capital structure is
