1) Select one reason a company's capital structure may include more equity than debt

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1) Select one reason a company's capital structure may include more equity than debt.

• Relying too heavily on debt can increase the interest rate that a company must pay on its debt.

• Taking on more equity means that a company will be more leveraged.

• Equity has significant tax advantages that debt does not.

• Too much debt will decrease a company's volatility.

2) Which of the following is an example of a market risk for a company that manufactures automobiles?

• Being suddenly unable to source a critical component of the automobile

• A competitor that offers a similar line of cars with comparable quality at lower prices

• A failure in the company's accounts receivable process

• Damage to completed cars being transported to a buyer