What is the Modigliani and Miller Capital structure theory and the assumptions of the theory? What are Proposition I and Proposition II?

Q: Discuss the differences between the three forms of capital market efficiency?

A: Capital market efficiency- It is related to a condition where all the information pertaining to the…

Q: Explain with examples if you can what's meant by this theory briefly Capital Structure Theory

A: Capital structure theory is an important theory in financial management of a business organization.

Q: How much is legal capital?

A: it's the nominal value of all the accumulative shares issued by the corporate. for example, if a…

Q: What's the difference between the capital asset pricing model and modified capital assset pricing…

A: Capital Asset Pricing Model CAPM describes the relationship between systematic risk and expected…

Q: What are the risks of investing in an ESOP?

A: ESOP stands for Employee Stock Ownership Plan. It is a plan that gives an ownership interest in the…

Q: Differentiate between agency theory and pecking order hypothesis of capital structure. In each case,…

A: Agency theory:-This theory main aim is to resolve disputes over pritorizing different sources of…

Q: What is the cost of capital rate in the question?

A: Cost of capital is the WACC of the project. WACC is equal to weighted average cost of capital. WACC…

Q: What is the notion of capitalization effects and how does it work

A: The notion of capitalization effects and how does it work will be explained:

Q: AAP should require fair value measurement of either more o

A: A fair value measurement is used to determine the worth of a certain asset or liability. As a…

Q: how the cost of capital serves as a screening tool when dealing with the net present value method…

A: Answer with explanation are as follows. cost of capital - cost of capital is a expected rate of…

Q: what is the answer for Jimin Parl, Capital?

A: Lets understand the basics. As per balance sheet equation, total assets are always equal to total…

Q: What is issued capital? How does it differ from Authorized capital?

A: Company needs the funds for business purpose. Hence, Company raise capital.

Q: Explain what is capital or capital financing? Examples

A: capital financing is the form of business finance that is raised through equity funds and lenders…

Q: Summarize the basic procedure of Net-Present-Worth Criterion?

A: Step 1: Initially ascertain the initial investment of the initial outlay amount (CF0). The initial…

Q: What are the main criticisms of the Capital Asset Pricing Model (CAPM)? What does the empirical…

A: Capital Asset Pricing Model is a financial theory stating the linear relationship between required…

Q: In the case of the net present value technique, explain how the cost of capital is used as a…

A: The question tells about the net present value technique and  how the cost of capital is used as a…

Q: What is financial analysis?

A: The question is based on the concept of financial decision making. Financial analysis are the set of…

Q: Explain economic impact of the capital market?

A: Capital markets are very important for the growth and development of any country and are important…

Q: You want to argue against the taxation of interest income. a) Which simple interpretation of the…

A: Atkinson–Stiglitz-: The Atkinson–Stiglitz theorem is simply a theorem of public economics which says…

Q: Discuss the main assumptions of the Capital Asset Pricing Model (CAPM).

A: The Capital Asset Pricing Model (CAPM) is a widely used financial model that calculates the expected…

Q: The cost of capital is a hurdle rate. Is this statement true? Why or why not?

A: The question is based on the concept of minimum required rate for any project . Hurdle rate is the…

Q: What is Capital, Capitalization and Capital Structure in your own words.

A: Entrepreneurs use startup capital to cover any or all of the costs associated with starting a new…

Q: Capital Asset Pricing Model

A: The Capital Asset Pricing Model Is also known as CAPM. CAPM shows the relationship between…

Q: Which you prefer, equity or fixed income?

A: Differences between equity and fixed income: Equity: Corporates issues most of the equity There is…

Q: Explain what capital structure theory attempts to do and demonstrate useful lessons that can be…

A: Capital structure theory refers to a formulated and well-organized structure that reflects the…

Q: Why should the capital expenditures be capitalized?

A: Capital Expenditures:   Capital expenditures are those which provide future economic benefits by…

Q: Explain Capital Accounts?

A: Capital :                 Generally refers to the amount invested in an enterprise by its owners eg…

Q: what is the efficient market hypothesis. What does it say, if any, about individual financial…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: What will be the Simultaneous Effects of Real Market Forces and Interest Rates on Property Values?a

A: There are various factors which affect the long term trends and short term trends in values of…

Q: Why can we not invest net income? Explain with an example?

A: The net income is the net profit of the company earned during the period. The net income includes…

Q: orking capital?What are types of worki

A: Working capital or net working capital is total current assets less total current liabilities as…

Q: discuss the advantages and disadvantages of using return on capital employed ?

A: We have to find the advantages and disadvantages of using return on capital employed (ROCE).

Q: Differentiate between Simple and Nonsimple Investments?

A: Simple investment: Simple investment is a type of investment in which the investment sign will…

Q: What is the trade-off theory of capital structure?How does it differ from MM’s theory?

A: Trade off theory of capital structure: This is a theory in which the company decides on the ratio of…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.