What rate do investors use to discount the capital gains and cash flows of firms?

Q: Why might a large corporation want to raise long-term capital through a borrowing money from…

A: Raising money from financial institutions increases the likelihood of finding investors who share…

Q: Is it financial expediency for firms to borrow?

A: The acquisition of debt funds by businesses is far more convenient than any form of funds and far…

Q: How can processes, policies and controls related to a company’s finance and investment cycle affect…

A: An internal control are those rules, policies, control and procedure that is implemented by the…

Q: what determines the market value of a company are not profits, per se, but rather, cash flows?

A: Market value of a company : In simple words, the market value of a company refers to the value of a…

Q: How does additional debt in a firm influence its WACC? its free cash flow (FCF)? the agency costs of…

A: Debt is the presence of additional financial leverage in the total business and it will be having…

Q: Why should a firm's investments always exceed its cost of capital?

A: The main aim behind any investment is to generate returns for the company. These projects help the…

Q: What is capital rationing? What types of firms might encounter capital rationing?

A: A plan adopted by any organization to limit the several new projects or investments in any…

Q: What is the role of investment banks and how can they help companies raise capital?

A: Solution-   Investment banks are a bridge between investors and also the massive enterprises. The…

Q: Which of the following is the definition of Capital Structure"? * O the amount of capital in the…

A: Capital structure is the ratio of capital components in which a company finances its activities.

Q: Why would a company decide to pay investors cash? What are the two ways to give cash back to…

A: Cash is paid in terms of dividends.

Q: Why is it that the goal of financial management is maximization of shareholders’ wealth rather than…

A: Financial management is defined as the planning, organizing, directing, and also the controlling of…

Q: what is the relationship between management of business finance and company`s financial performance…

A: Managing Business Finance means to utilize the funds of the business out of various means such as…

Q: What information do investors and creditors need when determining which companies will receive…

A: Accounting: Accounting is a system, or a process of collecting and organizing economic transactions,…

Q: id-in-capital and retained earnings: Similar? Different? What are the main categories of paid-in…

A: It is usually split into two different line items: common stock (par value) and additional paid-in…

Q: What is the lowest dividend a firm could pay? What types of firms generally pay high dividends?…

A: Dividend is not compulsory to pay, when the company earns good profits , Board of directors…

Q: How is a firm’s intrinsic (or fundamental) value related to its freecash flows and its cost of…

A: Answer: Intrinsic value is nothing but the understanding by an owner of an asset’s inherent value,…

Q: How would rising interest rates, that increase the weighted average cost of capital  (WACC) impact…

A: Weighted average cost of capital is the average cost of capital weighted by the proportion of the…

Q: how does cost of capital affects a firm's decision on the distribution of dividends?

A: Cost of capital is defined as an required return, which is important for making the capital…

Q: What capital components are typically included when estimating a firm’s corporate cost of capital?…

A: Before we address the question, let's understand a bit about the capital itself.Capital:Capital is a…

Q: What are the advantages/disadvantages of using the discounted cash flows method of estimating the…

A: Discounted cash flows method : Discounted cash flow method considers the time value of money in…

Q: Does it ever make sense for a profitable company with positive cash flow to seek external financing?…

A: External financing is any kind of business funding you acquire from sources outside the company.…

Q: Dividend is a financing decision as well as distribution of earnings.  Do you agree with the…

A: Dividend is the distribution of the company’s earnings to the shareholders of the company. A…

Q: Financial markets: efficient and other.  How are financial firms able to make profits? Under what…

A: Introduction: Usually, financial institutions such as banks and insurance providers raise and pool…

Q: When does a firm said to have a simple capital structure?

A: The capital structure of a company means a mixture of debt and equity sources of finance of the…

Q: REQUIRED: ANSWER THE FOLLOWING QUESTIONS IN POINT FORM • What is the difference between book value…

A: We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Does it matter if the firm raises capital through debt or equity? Why or Why not?

A: Debt involves borrowing money that is to be repaid including the interest. Whereas equity involves…

Q: What are the advantages and disadvantages of a company raising capital through the issuance of…

A: Equity is the owner’s share of capital in the company.  Equity share capital is the owned capital.…

Q: What are the company motives for declaring dividends or stock repurchase programs? 2. How would you…

A: Because you have asked multiple questions, we will solve the first question as per the policy of…

Q: Did the cash flow from operations cover the dividend payment made by the firm (if any)?

A: Hello, since your question has multiple parts we will solve the first question for you. If you want…

Q: Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value…

A: The free cash flows valuation approach will be a theory for determining a company's intrinsic value,…

Q: How can the fundamental price of a firm contribute to the wealth maximization of a firm?

A: The fundamental price of a firm depends on its intrinsic value which is dependent on the present and…

Q: w does current ratio and quick ratio relate to a firm's financial profitability? What should the %s…

A: Current ratio and quick ratio are important from view point of liquidity and liquidity is very…

Q: In what ways the operating, investing and financing cash flows of a growing firm might be different…

A: Cash flow statement has three sections operating activities, investing activities, and the financing…

Q: Why do firms change their dividends policy?

A: Dividends are paid as a reward to the shareholders in lieu of the money given to the corporates for…

Q: Can a firm have income without also having a positive cash flow? Explain.

A: Cash Flows are the inflows & outflows of cash in the business to meet the day to day activities.…

Q: What are some factors that affect capital structure decisions made by management? What are the…

A: Capital structure is the mix of debt and equity carrying by the company. The debt and equity are…