Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Basic Finance Expert

The business risk and the optimal capital structure of a firm, the tutor made the following statement: ??The main factors that affect the business risk are the ability to adjust output prices and operating leverage and business risk is the uncertainty regarding the net income of a firm. For a levered firm 40/60 debt to equity ratio is the optimal capital structure, which always maximizes the value of a firm. ??Do you agree or disagree with the tutor's statement? Briefly describe.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M939278

Have any Question? 


Related Questions in Basic Finance

A firm is expected to pay a dividend of 355 next year and

A firm is expected to pay a dividend of $3.55 next year and $3.85 the following year. Financial analysts believe the stock will be at their price target of $120 in two years. Compute the value of this stock with a requir ...

Suppose you are expecting your fourth child in six months

Suppose you are expecting your fourth child in six months and you need a bigger car. You have your eye on a used three-year-old minivan that currently costs approximately $10,000. You are concerned about the pricing and ...

The text web site has links to several sites with

The text Web site has links to several sites with information about stored-value cards. Some are maintained by card issuers, others by government agencies or consumer advocates. After visiting some of these sites, discus ...

Feds control of inflation assume that the feds primary goal

Fed's Control of Inflation : Assume that the Fed's primary goal is to reduce inflation. How can it use open market operations to achieve this goal? What is a possible adverse effect of such action by the Fed (even if it ...

Assignment instructions-1 enter your student class number

Assignment Instructions- 1. Enter your student class number in cell A1 under the "Firm's debt tab" 2. Look at that "Spreads&Treasuries" tab to find your rating. Each of your debts has the same rating. Enter the rating le ...

Why is the actual value of a financial variable different

Why is the actual value of a financial variable different from the optimal forecast of that variable? Assuming that expectations are rational, what, on average, will be the difference between the actual value and the opt ...

At the end of 2011 home depots total capitalization

At the end of 2011 Home Depot's total capitalization amounted to $28,992 million. In 2012 debt investors received interest income of $635 million. Net income to shareholders was $4,526 million. (Assume a tax rate of 35%. ...

Createnbspa 700- to 1050-word paper or 16- to 24-slide

Create  a 700- to 1,050-word paper or 16- to 24-slide presentation using a modality of your choice. Explain  the differences between the following: Job Costing Process Costing Standard Costing Direct Costing Throughput C ...

Your firm needs a computerized machine tool lathe which

Your firm needs a computerized machine tool lathe which costs $60,000 and requires $13,000 in maintenance for each year of its 3-year life. After three years, this machine will be replaced. The machine falls into the MAC ...

Bailouts by the fed do you think that the fed should have

Bailouts by the Fed: Do you think that the Fed should have bailed out large financial institutions during the credit crisis?

  • 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

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate