Which is true of equity financing?   It has no fixed maturity date It provides a tax shield It offers creditors no cushion against losses Struggling companies still need to pay dividends

Q: 1) Finance manager creates problems in decision-making process where money is involved. True False

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: Which of the following statements is CORRECT? The debt ratio that maximizes expected EPS generally…

A: Capital structure refers to the mix of a company's long-term financing sources, specifically the…

Q: What are the reasons that highly profitable firms use debt financing? 1 they have sufficient…

A: Bank is an institute which gives umbrella when sky is clear but sits back when its raining. So…

Q: According to pecking order theory, managers will often choose to fina O New equity rather than debt,…

A: The pecking order theory is a financial theory that describes how companies prioritize and choose…

Q: What were the direct and indirect costs of the LIBOR scandal for Barclays? Are these costs only a…

A: The LIBOR Scandal: The LIBOR Scandal came to light in 2012 when Barclays and other banks admitted…

Q: under what circumstances might a company choose not to pay dividends?

A: Dividend Payment and non-payment will be decided by the company based on the future opportunity of…

Q: A firm cannot maintain a return on common equity less than the required rate of return and stay in…

A: Required rate of return is the minimum return rate which is accepted by the shareholders for the…

Q: How can an investor benefit from ane equity investment that does not pay dividends?

A: In layman’s words, financial management is the management of the finance or funds in an…

Q: 18. Which of the following statements is true? A. Payment on interest on debt is considered an…

A: Please note that under the answering guidelines only 1 question can be solved. Since multiple…

Q: True or false  According to the pecking order theory of capital structure firms should never issue…

A: Capital structure is the combination of different sources of finance for the company's assets.…

Q: Floatation or issuance cost of new securities are present in an imperfect economy.     True False

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Please answer “True” or “False” to the following statements.   Only long-term debt is first in…

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: A firm can increase its earnings growth yet not affect the value of its equity. True OR False ???

A: Equity value is the value of a company available to owners or shareholders.

Q: FASB allows debt to be shown at its fair market value. Consequently, if a company in financial…

A: Financial Accounting Standards Board (FASB) The FASB, located in Norwalk, Connecticut, is an…

Q: What is the difference between dividends that are declared and dividends that are paid

A: There exist difference between dividend that is declared and paid

Q: a future investment opportunities? or should maintain its liquidity to fund its investment rather…

A: Companies have cash from the operations of the company and they have options to use the cash one is…

Q: The Enterprise Value of a privately-owned firm is often discounted relative to their publicly-traded…

A: Economic value is the size of the advantage derived from a good or service to a person or a…

Q: Identify the term being referred to: A theory that states that how high or low an entity pays out…

A: Solution:- There are two theories related to dividend-  Dividend relevance theory and dividend…

Q: If we drop the assumption that there are no information and transaction costs, in addition to…

A: As per Modigliani and Miller model, capital structure is relevant in valuing a company when there is…

Q: Identify the following as either an advantage or a disadvantage of bond financing for a company.

A: A bond is a debt security or financial instrument that represents a loan made by an investor to a…

Q: Consider the following statements: The Trade-off theory of capital structure cannot explain the…

A: The Trade-off theory of capital structure cannot explain the following: I. Why profitable firms have…

Q: Which of the following is one of the causes of over capitalization? a. Reduction in the market…

A: Over Capitalization means when a company have huge amount of debt in its book and its Net assists…

Q: Assume we are in a M&M frictionless world EXCEPT that we have bankruptcy costs only. Under these…

A: In the Modigliani and Miller (M&M) propositions without taxes and other frictions, capital…

Q: Why can't the full retained earnings balance be used to pay a dividend A B C D Because the firm must…

A: Dividend is the amount of earnings of the company which is distributed to its shareholder's for…

Q: Liquidity dry up could cause a financial institutions to become balance sheet insolvent. Briefly…

A: Liquidity dry up occurs when financial institutions have a shortage of accounting, funding, and…

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: How banks can improve their return on equity and what are its negative externalities.

A: RoE is ubiquitous in banks, serving as both an indicator of overall performance and a means of…

Q: Explain what happens to the firm’s cost of equity, cost of debt, and cost of capital when the firm…

A: Modigliani and Miller's approach (M&M) states that the valuation of a firm is independent of the…

Q: Why might a rational investor invest in the stock of a company that pays no dividend?

A: Investor The person or company that makes an investment with the expectation of making a profit is…

Q: Do solve it asap   During a restructuring, what could happen to the balance sheet of a company?…

A: What is meant by Restructuring? When the firm is under bankruptcies, at that time restructuring…

Q: hat does it mean when a company has zero net income but its stock price has increased? How do you…

A: Equity method: The equity method is used to record the profit earned by a company by investing in…

Q: Which of the follwong is a true statement about Risk Capital or Owner's Equity? There is no legal…

A: Onwer's equity is sometimes known as risk capital because the equity owner's will get the dividends…

Q: Minimizing liquidity is an excellent way to meet a company's short-term financial obligations. 1)…

A: Liquidity means ability of the company in paying its short term obligations or liabilities.…

Q: Which one of the following is NOT an implication of market efficiency for corporate finance?

A: Since you have posted multiple independent questions in the same request, we will solve the first…

Q: In calculating the value of a firm's equity which of the following is incorrect? Multiple Choice O O…

A: The value of a firm refers to the economic worth or financial significance assigned to the entire…

Q: Debt overhang occurs when: 1. A company is so indebted that it has little incentive to invest as…

A: Meaning of debt overhang: It is a situation in which a high amount of debt is there in the company…

Q: Companies cannot as a general rule reduce the capital of the business. However, there may be a class…

A: Share capital is the capital which has been contributed by the shareholders of the company by the…