How WACC is related to the level of leverage (debt/equity ratio) of a firm. What are the key differences between the main capital structure theories?
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How WACC is related to the level of leverage (debt/equity ratio) of a firm. What are the key differences between the main capital structure theories?
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- Explain briefly how WACC is related to the level of leverage (debt/equity ratio) of a firm. What are the key differences between the main capital structure theories?What is the debt ratio at the optimal capital structure of XYZ Inc.?Based on the Liquidity ratio, which ratio determine stability, earning power and capital? Explain the formula and its impact & importance. Choose one only.
- How do free cash flows and the weighted averagecost of capital interact to determine a firm’s value?Explain why the required rate of return on a firm's assets must be equal to the weighted average cost of capital associated with its liabilities and equity. Explain using the concepts from the course.What information do liquidity ratios yield about a firm
- Describe how the following factors affect external capitalrequirements: (1) payout ratio, (2) capital intensity, (3) profitmargin.What is the Cost of Equity Capital?How does a semi-strong market affect a company’s capital structure? Discuss the possible exposures and impact. Provide examples to justify your reasoning.
