Homework Answers
The following can be considered as disadvantage of a corporation using debt financing:-
D. All of the above can be disadvantage of debt financing
Add Answer to:
Which of the following can be considered as a disadvantage of a corporation using debt financing?...
D37. A major disadvantage for shareholders, of using debt financing, is: the company is locked in...
D37. A major disadvantage for shareholders, of using debt financing, is: the company is locked in to fixed payments of interest and principal shareholder control is altered interest is not deductible for tax purposes debtholders assume full control of the company 38. If a company declares a 10% share dividend on its ordinary shares, the account to be debited on the date of declaration is: Retained Earnings Ordinary Share Dividend Payable Paid-up Capital Ordinary Shares 39. An appropriate journal entry...
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt...
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt securities. Examine the following two statements and indicate whether each represents an advantage or a disadvantage to the or the investor issuer By being classed as creditors, debtholders Debt securities can increase the issuer's have priority in cash flows and assets as earnings per share, everything else remaining constant compared with shareholders. Does the preceding statement indicate an Does the preceding statement indicate an...
4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of...
4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Which of the following is considered a financially leveraged firm? O A company that uses debt to finance some of its assets O A company that uses only equity to finance its assets Which of the following is true about the leveraging effect? Using leverage...
The is the interest rate that a firm pays on any new debt financing. Wat after-tax...
The is the interest rate that a firm pays on any new debt financing. Wat after-tax cost of debt VPC) can borrow funds at an interest rate of 10.20% for a period of five years. Its marginal federal-plus-state tax rate is 25% before-tax cost of debt Pebt is __ (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a...
POP Financing activities section of the cash flow statement. Operating activities section of the cash flow statemen...
POP Financing activities section of the cash flow statement. Operating activities section of the cash flow statement. Investing activities section of the cash flow statement both a and b. POP The times interest earned ratio uses income before interest expense and taxes because interest and taxes are important components in all ratio analysis. paying interest and taxes does not affect a company's solvency. the ratio is easier to compute without these items. this number best represents the amount available to...
Ch 04, blueprint probs, analysis of financial statements. 4: Analysis of Financial Statements: Debt Management Ratios...
Ch 04, blueprint probs, analysis of financial statements. 4: Analysis of Financial Statements: Debt Management Ratios Debt management ratios measure the extent to which a firm uses financial leverage and the degree of safety afforded to (1)(creditors, analysts, shareholders)They include the: (1) Debt-to-capital ratio, (2) Times interest earned ratio (TIE), and (3) EBITDA coverage ratio. The first ratio analyzes debt by looking at the firm's (2)(cashflow statement, income statement, balance sheet), while the last two ratios analyze debt by looking...
Which of the following statements concerning common stock and the investment banking process is NOT CORRECT?...
Which of the following statements concerning common stock and the investment banking process is NOT CORRECT? If a firm sells 1,000,000 new shares of Class B stock, the transaction occurs in the primary market. Private placements can generally bring in funds faster than is the case with public offerings. Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with management's performance, an outside group may ask...
Which of the following may be considered a perverse incentive for a firm? A firm issues...
Which of the following may be considered a perverse incentive for a firm? A firm issues additional equity and uses the proceeds to invest in a high-risk project that it knows to have a high likelihood of failure. A firm issues a convertible bond knowing that the bond would naturally have a comparatively low interest rate since bondholders can convert it to the firm's common stock if the firm does well. A firm borrows heavily and invests the amount in...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it C. invests. Bondholders should...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following statements is correct? a. A warrant is basically a long-term option that enables the holder to sell common stock back to the firm at an agreed upon price, at a specified time in the future. b. Generally, warrants are distributed along with preferred stock in order to make the preferred stock less risky. c. If a company issuing coupon paying debt wanted to reduce...
D37. A major disadvantage for shareholders, of using debt financing, is: the company is locked in to fixed payments of interest and principal shareholder control is altered interest is not deductible for tax purposes debtholders assume full control of the company 38. If a company declares a 10% share dividend on its ordinary shares, the account to be debited on the date of declaration is: Retained Earnings Ordinary Share Dividend Payable Paid-up Capital Ordinary Shares 39. An appropriate journal entry...
Long-term debt offers advantages and disadvantages to the issuing firm and to the investor in debt securities. Examine the following two statements and indicate whether each represents an advantage or a disadvantage to the or the investor issuer By being classed as creditors, debtholders Debt securities can increase the issuer's have priority in cash flows and assets as earnings per share, everything else remaining constant compared with shareholders. Does the preceding statement indicate an Does the preceding statement indicate an...
4. Debt management ratios Aa Aa E Companies have the opportunity to use varying amounts of different sources of financing to acquire their assets, including internal and external sources, and debt (borrowed) and equity funds. Which of the following is considered a financially leveraged firm? O A company that uses debt to finance some of its assets O A company that uses only equity to finance its assets Which of the following is true about the leveraging effect? Using leverage...
The is the interest rate that a firm pays on any new debt financing. Wat after-tax cost of debt VPC) can borrow funds at an interest rate of 10.20% for a period of five years. Its marginal federal-plus-state tax rate is 25% before-tax cost of debt Pebt is __ (rounded to two decimal places). At the present time, Water and Power Company (WPC) has 15-year noncallable bonds with a face value of $1,000 that are outstanding. These bonds have a...
POP Financing activities section of the cash flow statement. Operating activities section of the cash flow statement. Investing activities section of the cash flow statement both a and b. POP The times interest earned ratio uses income before interest expense and taxes because interest and taxes are important components in all ratio analysis. paying interest and taxes does not affect a company's solvency. the ratio is easier to compute without these items. this number best represents the amount available to...
Which of the following statements concerning common stock and the investment banking process is NOT CORRECT? If a firm sells 1,000,000 new shares of Class B stock, the transaction occurs in the primary market. Private placements can generally bring in funds faster than is the case with public offerings. Stockholders have the right to elect the firm's directors, who in turn select the officers who manage the business. If stockholders are dissatisfied with management's performance, an outside group may ask...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it C. invests. Bondholders should...
Name Date Principles of Finance Chapters 1 & 2 Week 6 11. Which of the following statements is correct? a. A warrant is basically a long-term option that enables the holder to sell common stock back to the firm at an agreed upon price, at a specified time in the future. b. Generally, warrants are distributed along with preferred stock in order to make the preferred stock less risky. c. If a company issuing coupon paying debt wanted to reduce...
Most questions answered within 3 hours.
-
Write a psudocode:
1. Define a function called authorize that takes in 2 strings,
uName, and...
asked 3 minutes ago -
What Hall voltage (in mV) is produced by a 0.180 T field applied
across a 2.60...
asked 2 minutes ago -
What mass of ethylene glycol (C2H6O2) must be added to 211.0 g
of water to obtain...
asked 5 minutes ago -
Mary's employer has a defined benefits retirement plan, which
pay 3.2% of her last year's salary...
asked 8 minutes ago -
What are the characteristics and behavior of an ethical
manager?
Explain, in your words, what ethics...
asked 25 minutes ago -
1. Which of the following is NOT an argument that McMahan uses
to show that jus...
asked 46 minutes ago -
A crate slides up a frictionless slope. At the end of 3 seconds
its velocity is...
asked 1 hour ago -
Use the following information to answer the next seven
questions.
Suppose there are three potential states...
asked 59 minutes ago -
If we only have interstitial and substitutional diffusion, then
what do we consider the process of...
asked 1 hour ago -
You look at yourself in a shiny 9.6-cm-diameter Christmas tree
ball.
If your face is 21.0...
asked 1 hour ago -
If we were to measure the relaxation time of a muscle after
undergoing tetanus compared to...
asked 1 hour ago -
4CO(g) + 8H2(g) -----> 3CH4(g) +
CO2(g) + 2H2O(l)
Use the following data as needed to...
asked 1 hour ago