What are some reasons that a company might choose common stock as means of financing their business rather than using debt? Also comment on why a company might choose debt over common stock.

Q: The debt to assets ratio is one of the analysis tools used to evaluate the impact of debt holding on…

A: 1) DEBT TO ASSETS RATIO It is a leverage ratio. This is used to calculate the total amount of…

Q: iscuss the benefits an

A: Introduction : A public company refers to a company where there are many shareholders and the shares…

Q: What is the difference between financing a corporation with debt vs equity Provide an example of…

A: There are different sources of finance that a corporation can use for its business purpose when it…

Q: under what circumstances might a company choose not to pay dividends?

A: Dividend Payment and non-payment will be decided by the company based on the future opportunity of…

Q: To what extent a company uses debt financing (or financial leverage) in business operations?

A: The question is based on the concept of capital structure of a company, the capital structure is a…

Q: How is an investment banker compensated for promoting and facilitating the sale of a company’s…

A: Investment banker (IB) is the special facility given by the banks or separate institutes which…

Q: what is the price of company stock? iS IT WORTH TO INVEST IN? EXPLAIN

A: We are given some financial ratios  for 3 consecutive years for a company based on which we need to…

Q: Discuss and explain why a company may choose to raise capital by issuing bonds instead of issuing…

A: Capital is the source where the company raised money to run the business. There are two ways: Bonds…

Q: Question Four  i. Discuss the reasons why small and medium-sized entities (SMEs) might experience…

A: Debt Finance Debt finance is considered to be one of the important sources of income for the…

Q: Why would a company invest in debt or equity securities?

A: Debt securities: The financial instruments which are bought by investors, or corporations, or mutual…

Q: One of the primary reasons for investing in debt securities includes a. Deducting interest payments…

A: One of the primary reasons for investing in debt securities includes Earning interest revenue.…

Q: Which of the following statements are false? (you may choose more than one statement)        A…

A: Option A. is False The issue of ordinary shares will not dilute ownership of the company. Option C.…

Q: Contrast the differences/similarities of common stocks and bonds. Explain how they would be used in…

A: The difference between the common stock and the bonds is that the stocks are the shares that define…

Q: Why are the costs of selling equity for a corporation so much larger than the costs of selling debt?

A: Introduction Debt and Equity are part of the capital structure of a company. The cost of equity is…

Q: Question: Do you think there is an ideal mix of debt and equity across corporations? Elaborate your…

A: In the current financial structure where we have 60% Debt and 40% .  We understand the accounting…

Q: Which of the following is a cost associated with an IPO? Interest expenses Out-of-pocket expenses…

A: Company means the form of business where management is separately from owner and have perpetual…

Q: Equity is the Amount of a company's capital is owned by the shareholders. In sole proprietorship and…

A: solution concept In a balance sheet of company There is asset , liabilities and equity Equity means…

Q: the issuance of its stock is an example of which type of business activity?

A: First we should know the meaning of all this terms,  a) Operating :- Its name is explaining…

Q: What impact does the inability to issue common stock have on a not-for-profit business's capital…

A: We have to discuss the effect of the inability to issue common stock on Capital Structure and…

Q: How is the accounting for a purchase of a company’s own stock (treasury stock) different from the…

A: A company’s stock is the shares a company holds or the shares on which a company has its ownership…

Q: What are the relative benefits and drawbacks of selling bonds, common stock, and preferred stock…

A: The main objective of the company is to reduce the overall cost of issuing the capital. The Company…

Q: refers to the way a company finances itself through some combination of loans, bond sales, preferred…

A: The mix of equity and debt in a business organization is known as the capital structure of the…

Q: One of the fundamental questions of corporate finance is how a firm should leverage its capital…

A: The capital structure of a firm relates to the exact proportion of the debt and the equity utilized…

Q: Which characteristic of a corporation limits a stockholder's loss to the amount of his or her…

A: 1. A corporation is a legal entity i.e. it is a separate entity from its owners (shareholders). A…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: Introduction: Capital gain is referred as any profit or gain that coming from the sale of a ‘capital…

Q: Contrast the differences/similarities of common stocks and bonds. How are they used in the corporate…

A: Common Stock: This security represents the ownership of a company. Common stock is also known as a…

Q: 1. The debt to assets ratio is one of the analysis tools used to evaluate the impact of debt holding…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Is a company's dividend policy payment important? Please explain why or why not

A: Dividend:- dividend is distribution of profits by the company to its investors or shareholders,…

Q: Is there a type of stock preferable over the other? Should a corporation also utilize borrowing if…

A: Equity Stock represents the equity shares of a company. Equity shares are the part of company owned…

Q: 1. Answer the following questions for the Mason brothers. a) How are paid-in-capital and retained…

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: When do dividends become legal debt of the company?

A: Once the dividend is declared by the company, it has to pay dividend in certain deadlines. It…

Q: Discuss how a company's primary financial statements are useful to potential investors who are…

A: Stock investing requires careful analysis of financial data to find out the company's true worth.…

Q: When a business is organized as a corporation, which of thefollowing statements is true?a.…

A: When the business is organised as a corporation, then persons who acquire shares in the corporation…

Q: What would be the impact on the accounting equation when a company acquires treasury stock?…

A: Accounting equation: Accounting equation is an accounting tool expressed in the form of the…

Q: Owner’s equity represents which of the following? a. the total of retained earnings plus paid-in…

A: Owner equity means the amount that belong to the businessmen including the capital , retained…

Q: Which one of the following statements is TRUE?   a. Creditors have a claim on a firm's earning…

A: Charter is a legal document that contain details of the governance, structure, objectives and other…

Q: Why do companies use so many different types ofinstruments to raise capital? Why not just use…

A: Finance is the life-blood of every organization. Every organization needs finance for its day-to-day…