a. The number of shares outstanding, the per-share price, and the debt-to-equity ratio for Focus if it adopts the proposed recapitalization b. The earnings per share (EPS) and the return on equity (ROE) for Focus under the current and proposed capital structures c. The EBIT where EPS is the same for both capital structures. d. The EBIT where EPS is zero for both capital structures.

The distribution of a dividend that represents a partial return of the original investment made by the shareholders is known as a. participating dividend. b. liquidating dividend. c. property dividend.

Use the following information to answer the following question(s). a) What is the percentage of common stock in Sumitomo's weighted average cost of capital? b) What is the percentage of debt in Sumitomo's weighted average cost of capital? c) What is the percentage of preferred stock in Sumitomo's weighted average cost of capital? d) What is the total capital that should be used in computing the weights for Sumitomo's WACC?

The financial manager of a firm determines the following schedules of cost of debt and cost of equity for various combinations of debt financing:   Debt/Assets After-Tax Cost of Debt Cost of Equity 0 % 4 % 8 % 10   4   8   20   4   8   30   5   9   40   6   10   50   8   12   60   10   14   70   12   16     Find the optimal capital structure (that is, optimal combination of debt and equity financing). Round your answers for the capital structure to the nearest whole number and for the cost of capital to one decimal place. The optimal capital structure:   % debt and   % equity with a cost of capital of   % Why does the cost of capital initially decline as the firm substitutes debt for equity financing? The cost of capital initially declines because the firm cost of debt is  than the cost of equity. Why will the cost of funds eventually rise as the firm becomes more financially leveraged? As the firm becomes more financially leveraged and riskier, the cost of…

Select the best answer that addresses the source(s) of capital that firms use. Group of answer choices Debt Preferred stock Common Equity All options mentioned are sources of capital that firms use

With its earnings, a firm has a decision to make about whether to pay common dividends or a. pay depreciation expense on its fixed assets b. pay preferred dividends c. pay interest to bondholders d. reinvest for future growth On the income statement, interest expense is a. after-tax b. tax-deductible preferred dividents are a. tax-deductible b. after-tax and common dividends are a. after-tax b. tax-deductible Wages are considered a(n) a. an interest expense b. a depreciation expense c. a cost of good sold d. a research and development expense e. an operating expense A company usually expenses ( ) when it incurs them, because the future benefits that this spending is expected to bring are very uncertain and difficult to time. a. a depreciation expense b. an interest expense c. a cost of goods sold d. an operating expense e. a research and development expense