Is this statement true or false? Please explain in detail As debt-financing is usually cheaper than equity financing, debt-financing will lower risk for  transnational company.

Q: Which of the following issues is least relevant to treasury​ management?

A: Treasury Management: It involves managing the holdings of an enterprise, with the primary purpose of…

Q: Explain why very small to medium-size enterprises (SMEs) might face problems in obtaining…

A: The question aims to understand the challenges that small to medium-sized enterprises (SMEs) face…

Q: Financing with Debt Versus Equity. It is commonly understood that the cost of financing a…

A: For any entity, there are two ways of raising funds: Equity Financing and Debt Financing. Companies…

Q: Discuss MM proposition II under the situation when there are corporate taxes and risk-free debt.

A: Corporate tax is defined as the tax on the corporate's tax. Here, taxes used to make the payment on…

Q: 11.Explain why a firm needs to understand their allocation of debt financing to equity (the amount…

A: The major decision that a financial manager has to make while making the financing decision is to…

Q: Bank-based systems of financing non-financial companies are more effective than capital market-based…

A: Financial systems can help to keep domestic savings at home if they are well-governed. Financial…

Q: How does added debt potentially decrease the value of a firm?

A: Debt can be positive as well as negative, firms prefer to use debt in their capital structure to…

Q: Select all that are true with respect to the cost of debt. Group of answer choices it is the return…

A: The cost of debt refers to the effective interest rate a company pays on its debts. It's essentially…

Q: What does the Trade-off Theory say about the corporate's financing choices?Briefly explain.

A: Trade off theory is a capital structure theory which is trying to trade off between the benefit of…

Q: Please explain one advantage and one disadvantage of financing a company with debt.   Advantage…

A: Advantage: Tax BenefitsOne significant advantage of financing a company with debt is the potential…

Q: Given that a firm is well within its current ratio and debt ratio covenants and that interest rates…

A: The firm cash and cash equivalents and debt is determined by the current ratio and debt ratio and if…

Q: Describe the strenghts and weaknesses of companies dding debt in their capital structure.

A: Debt is a financial instrument which is used by the companies to fund their business. Companies…

Q: Explain what a unsecured debt, subordinated debt, senior debt is?   -is there risk in buying an…

A: Debt is the obligation that requires one party, the debtor to pay money to another party, the…

Q: What is the most obvious difference between debt and equity financing? a. Principal and interest…

A: Debt financing includes bonds and debts which are financial instruments and use to raise finance for…

Q: Which of the following is the risk due to a firm's debt usage?      Business risk     Financial…

A: The investments that we make in debt, equity and other financial securities are exposed to different…

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: Which of the following is incorrect about the Pecking Order Theory? A.Firms with high ratios of…

A: Several statements have been provided related to the Pecking Order Theory. We have to find the one…

Q: Identify the following as either an advantage (A) or a disadvantage (D) of bond financing for a…

A: Bond financing refers To the borrowing for the long term that is used by the state and local…

Q: Why do most analysts recommend against having a capital structure of zero debt?

A: Capital Structure of a firm is the mix of debt and equity which it uses to finance its operations or…

Q: The pecking order theory of capital structure suggests that managers will choose to utilise retained…

A: Pecking Order theory is an important theory in finance. It tells that the for funding purposes…

Q: Which of the following statement is correct?

A: Pecking Order Theory: As per this theory, the preference for sources for funds is first retained…

Q: Financial slack is the amount of unused access to debt markets or bank financing. Which theory of…

A: Without a doubt! The Pecking Order Theory, which was first developed by Myers and Majluf, two…

Q: True/False and Explain: Josephine says that firms which obtain debt financing by posting collateral,…

A: The objective of the question is to determine whether the statement made by Josephine is true or…

Q: Do you think companies have more incentive to report securitization as a sale or secured borrowing…

A: Window Dressing: It refers to the more formal steps that have been done to enhance the financial…

Q: When the firm gets acquired by a better fundamental company, does that increase, decrease, or have…

A: A credit spread is the difference in yield of a US Treasury security and the yield on a corporate…

Q: Is issuing equity or debt preferable in the current business climate? Why?

A: debt are issued by the company in order to raise the capital it is considered to be the liability…

Q: Which is the quickest way to determine whether a firm has too much debt?

A: A business is supposed to be overleveraged when it is conveying an excessive amount of debt when…

Q: What are pros and cons of raising money with debt? What is an alternative and why might some…

A: When a corporation generates funds by issuing debt instruments, this is known as debt financing.…

Q: All things considered stable cash flows enable higher debt borrowing.

A: Cashflows: These are movement of the money from various sources like operations, investment…

Q: Think from the borrower (management) and NOT lender (investor) points of view. Which is the less…

A: Analysis of the given options from the borrower points of view:   a) Bond financing- Bond financing…

Q: From the point of view of the borrowing business, loan capital tends to be cheap but risky. In what…

A: Company require large amounts of money for growth and expansion and money can be raised through debt…

Q: key benefits associated with refunding debt are the reduction in the firm's debt ratio and the…

A: The debt ratio is ratio that dictates that how much company has taken the debt out of its total…

Q: Which of the following is a disadvantage of long-term debt as a means of company financing? Group…

A: Funds are very important and necessary for smooth running of a business organization. A business has…

Q: Which of the following is incorrect about debt financing? A. Debt financing always generates excess…

A: Debt financing is a common method for companies to raise capital by borrowing funds. While it offers…

Q: What  leverage and the various debt ratios are used by an organization? What are the benefits and…

A: Leverage refers to the company's borrowed capital (debt) for various purposes such as new projects,…

Q: (1) What factors might lead a company to gainadditional funds through debt financing rather…

A: Financial Activities: Financial exercises are exercises that organizations embrace to assist with…

Q: Long-term debt financing can have a possibility of more funding but is more risky in terms of…

A: Long-term debt financing is the way of funding in which the institution lends long-term debt to the…