Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

problem1:  As debt is substituted for equity in the capital structure and the debt ratio increase, the behavior of the overall cost of capital is partially describeed by;

[A] The reduction in risk as perceived by the common share holders

[B] The decrease in the cost of equity

[C] The tax-deductibility of interest payments

[D] The increase in the number of common shares outstanding

problem2:  As fixed operating costs increase and all other factors are held constant, the degree of operating leverage will

[A] Remain unchanged

[B] Change in an undetermined direction

[C] Increase

[D] Decrease

problem3: The conflict resulting from a managers desire to increase the firm's risk without increasing current borrowing costs and lenders desire to limit lending is one effect of the ______________ problem.

[A] Capital

[B] Variable cost

[C] Agency

[D] Leverage

problem4: The major short coming of the EBIT-EPS approach to capital structure is that

[A] The technique only considers leverage – related risk

[B] The technique does not maximize earnings per share

[C] The technique does not promote the maximization of shareholders wealth.

[D] The technique does not consider the cost of capital.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M916808

Have any Question? 


Related Questions in Basic Finance

The us express reported that the color distribution for

The US Express reported that the color distribution for plain M&M's was: 40%brown, 20% yellow, 20% orange, 10% green, and 10% tan. Each piece of candy in a random sample of 100 plain M&M's was classified according to col ...

Create predictions about the relationships between

Create predictions about the relationships between behavioral variables that interest you. For each relationship that you develop, indicate how the prediction could be tested using a descriptive, a correlational, and/or ...

1 how may the use of leases shift the risk of rising

1. How may the use of leases shift the risk of rising expenses from the lessor to the lessee? 2. What is the difference between base or face rents and effective rents? 3. What is meant by useable vs. rentable space? 4. W ...

1 define the following termsa optionb callc putd contingent

1. Define the following terms: a. Option b. Call c. Put d. Contingent claim 2. What are the similarities and differences between options and warrants? 3. What variables are important in determining call option prices? 4. ...

Mass-transfer data were obtained for the vaporization of

Mass-transfer data were obtained for the vaporization of naphthalene into a turbulent gas stream flowing in an annulus. Both the inside rod and the outer pipe of the annular conduit were made of naphthalene. To correlate ...

What ethical considerations might enter into decisions that

What ethical considerations might enter into decisions that result in cash flow and stock price effects that are valued lower than they might otherwise have been?

Strident corporation is attempting to determine whether to

Strident Corporation is attempting to determine whether to lease or purchase a new telephone system. The firm is in the 40 percent tax bracket, and its after-tax cost of debt is currently 4.5 percent. The terms of the le ...

1 how have individual states become more active monitors of

1. How have individual states become more active monitors of takeover activity? 2. What is the signaling theory of mergers? What is the relationship between signaling and the mode of payment used in acquisitions? Is ther ...

Information for next four questions the nullcom inc is

Information for next four questions: The Nullcom Inc. is considering to purchase a new machine. The cost of the machine is $200,000 and installation of $10,000. The machine will be depreciated straight-line to zero. The ...

1 under what circumstances is it acceptable for a

1. Under what circumstances is it acceptable for a researcher to use deception in a study with human participants? 2. What kinds of information must be included accurately as part of the informed consent? (That is, what ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro