All things considered stable cash flows enable higher debt borrowing.

Q: The principle of gearing 2. Why debt is cheaper than equity 3. What the effect will be on the risk…

A: Gearing is the debt-to-equity relationship or ratio of a firm. Gearing indicates how much of a…

Q: Which of the following statements is not correct? Select the correct response: The principal amount…

A: ANSWER: WHEN A NON CASH ASSET IS ACQUIRED AND THE STATED RATE OF INTEREST IS DIFFERENT FROM THE…

Q: Which of the following is not a primary function of Money? a. All the options are correct b.…

A: Money is any item or verifiable record that is generally accepted as payment for goods and services

Q: Investors will pay a premium to invest in risky assets. OA. True OB. False

A: Risk premium is the extra return  that an investor receives for investing in risky assets.

Q: Having longer-maturity assets than liabilities causes banks to bear which of the following risks? I.…

A: a risk is an uncertain event that will occur or non-occurring and implies future uncertainty and…

Q: Financial decisions require that you weigh alternatives in strictly monetary terms. 1. True p. False

A: Step 1 Managers make financial judgments when it comes to a company's money. These decisions might…

Q: Debt will always have a cost basis. that is less than equity. OA. True OB. False

A: Debt - Debt is referred to as the amount of money that is borrowed by one party from another and is…

Q: 5. Which of the following incorrectly matches the classification of the debt investment with its…

A: The amortized cost means the accumulated portion of fixed asset expense or depreciation. One of the…

Q: Liquidity

A: A firm’s liquidity position plays a very important role in ensuring its survival in the market.

Q: Which statement is true? * General borrowings may earn investment income deductible against general…

A: Business may borrow funds for the purpose of business. These borrowings can be general borrowings or…

Q: Charecteristics Model approach IN FINANCE, can be used in determining the discount rate in equity…

A: The discount rate in the equity valuation describes the returns in the long term given as a…

Q: Loans are collateralized to: a increase returns b increase liquidity c reduce concentration risk d…

A: Note: Since you have posted multiple questions, we will solve the first question for you as per…

Q: Which of the following is not true with Money Market? Select one: a. Deals in short term funds b.…

A: Money market is a market wherein short term instruments are traded and only those investors who are…

Q: cash flow frequ ot the same, one W oved: the period

A: Period interest rate approach : In simple words, the period interest rate approach refers to the…

Q: Hi there, able to example of the Cost of debt part (a) if we didnt use Excel to formulate what is…

A: Cost of debt is denoted as the yield to maturity (YTM) of the bonds as it is the interest amount…

Q: 26. Real interest rate and real cash flows do not include A. equity effects B. debt effects C.…

A: Interest rate refers to the rate at which one party agrees to lend and the other party agrees to…

Q: A bank's net interest margin represents the proportion of its investments that are financed with…

A: The difference between interest paid and interest received, adjusted for the entire amount of…

Q: True/false   Under IFRS, the discount rate should reflect risks for which future cash flow…

A: False  Refer step 2 for explanation

Q: Behavioural finance deals with two main issues: Information processing areas & behavioural biases.…

A:

Q: Explain Minsky’s Financial Instability Hypothesis and mention the assumptions of the model.

A: The financial instability model hypothesis is a financial and economical model that has been…

Q: is it incorrect to use coupon rate of debt towards cost of debt? Briefly explain.

A: The organization needs money to run the business and achieve its goal. The company raises money by…

Q: Explain the concept of cointegration with examples from Finance where cointegration between a set of…

A: Finance is a vast field and involves the study of a financial or monetary system and various…

Q: bt financing is likely to appeal most strongly to organizations that have predictable profits and…

A: In Debt financing there are interest payment to be made each period but there are tax deductions for…

Q: FINANCIAL RISK MANAGEMENT  1. Duration is a measure of interest rates risk. (True/ False) 2. Bond…

A: The answers and explanations are provided below:

Q: Free cash flow method gives importance to both anchor and extra value. Do you agree?

A: The question is based on the concept of Financial analysis.

Q: Direct financing allows a borrower to:

A: Direct financing is a financing approaches in which the borrower (or financer) directly purchases…

Q: An increase in the riskiness of financial securities results in a_______ in the supply of loanable…

A: The riskiness of financial securities or financial risk is defined as the threat of losing the money…

Q: Choose option a,b,c,d,e for the following: Question 6 - A higher financial risk: a. Arises when…

A: Financial risk is concerned with the company's ability to generate sufficient cashflows.

Q: Free cash flow method gives importance to both anchor and extra value. Do you agree?

A: Free income determines the firm's potential and capability to come up with cash|extra money|more…

Q: Applications to acquire informal debt financing usually have lower standards or criteria but will…

A: Informal debt financing usually is small in nature besides being unsecured and having short term…

Q: When borrowers tend to pay back the loans to bankers earlier, the bank is facing a. Repricing risk O…

A: Since, more than one different questions are posted, answer for the first question is only provided…

Q: Finance in classical economics studies all of the following issues EXCEPT Time value of money…

A: Finance in calssical studies all the following: time value of money, equilibrium price risk, asset/…

Q: Net present value and the payback period are examples of discounted cash flow methods used in…

A: Various methods used in capital investment decisions are Pay back period, Accounting Rate of…

Q: To find NPV, it requires

A: NPV or net present value technique is used to determine the present value of all future cash flows.…

Q: True/False. The optimal amount of debt produces the highest weighted average cost of capital. Group…

A: Solution- The optimal amount of the debt produced the highest weighted averagecost of capital.-False