Explain why the following statement is true: Other things being equal, firms with relatively stable sales are

Question:

Explain why the following statement is true: “Other things being equal, firms with relatively stable sales are able to carry relatively high debt/assets ratios.”

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Principles of Finance

ISBN: 978-1285429649

6th edition

Authors: Scott Besley, Eugene F. Brigham

See More Books

Question Posted: Nov 24, 2014 09:25 AM

See More Questions

Explain why the following statement is true: "A firm with a demand curve that is inelastic at its current output level can always increase its profits by raising its price and selling less."
Explain why the following statement is not necessarily true: ''If the IRS disagrees, I'll take my case all the way to the Supreme Court.''
Explain why the following firms might choose a dual distribution strategy: a. Netflix b. Home Shopping Network c. Target
# Ch. 6 Homework 1. EX.06.01 2. EX.06.03 3. EX.06.04 4. EX.06.09 5. PR.06.01A Progress: 1/5 items Assignment Score: 40% v2.cengagenow.com Delgadillo Chegg Accounting MRK & ECO Extra credit...
Define what is meant by media richness and name and describe the richness of various communication media sources.
What is full dollarization? How does it differ from a currency board? What is seigniorage?
Assume that, instead of issuing a fixed number of shares, the directors of Celibes plc ( see Example 7.3 ) wish to maximise the amount raised from the share issue. What would be the appropriate...
Mike Wilde is president of the teachers union for Otsego School District. In preparing for upcoming negotiations, he would like to investigate the salary structure of classroom teachers in the...
Corner Restaurant is considering a project with an initial cost of $211,600. The project will not produce any cash flows for the first year. Starting in Year 2, the project will produce cash inflows...
14 . You are planning a project to make dinner for guests. Your menu consists of a very special soup, and a baked chicken entre consisting of chicken, rice, and peas. The soup must be boiled for 35...
Christina Manning, great-granddaughter of the founder of Manning Tile Products and current president of the company, believes in simple, conservative accounting. In keeping with her philosophy, she...
Explain how a firm might shift its capital structure so as to change its weighted average cost of capital (WACC). What would be the impact on the value of the firm?
What do you mean by the different phases of a pure substance?
CLT HW Score: 0/19 0/19 answered Question 4 < = 31. You intend to draw a A population of values has a normal distribution with = 232.9 and random sample of size n = 165. Please show your answers as...
Q-3: Estimate fxy dx + x2 dy: where c is given by [Hint: Use Green's theorem -1
1. Determine completely the resultant of the four forces shown in the figure. Each force makes a 15 angle with the vertical, except the 200 N force which is vertical. Find the action line (position)...
1: Based on the results of your Learning Style produce a 1 pg reflection. (this is the result of the test i took: Your learning preference:Multimodal (AK) SharePeople with your preference like:...
Explain what the petty cashier should do if he or she thinks that the imprest amount is inadequate.
The following trial balance has been extracted from the books of account of Greet plc as at 31 March 19X8: Required: Insofar as the information permits, prepare the companys published profit and loss...
If a test has high reliability. O the test measures what the authors of the test claim it measures O people who take the same test twice get approximately the same scores both times O scores on the...
Auto Parts, Inc. ('the Company) manufactures automobile subassemblies marketed primarily to the big three U.S. automakers. The publicly held Companys unaudited financial statements for the year ended...
Based on your knowledge from previous chapters, what are some methods an investment banker uses to determine an IPO price? What factors will play a significant role in the calculation?
A majority of firms choose to issue an IPO using a firm-commitment underwriting arrangement rather than a best-effort arrangement. Explain why.
What are some of the reasons raising debt financing is cheaper than equity financing?
You have just been hired as a new management trainee by Earrings Unlimited, a distributor of earrings to various retail outlets located in shopping malls across the country. In the past, the company...
Brief Exercise 10-6 Flint Inc. purchased land, building, and equipment from Laguna Corporation for a cash payment of $327,600. The estimated fair values of the assets are land $62,400, building...
"faithful respresentation" is the overriding principle that should be followed in ones prepaparation of IFRS-based financial statement. what is it? explain it fully quoting IAS. how this this...

Explain why the following statement is true: Other things being equal, firms with relatively stable sales are

Question:

Step by Step Answer:

If sales tend to fluctuate widely then cash flows and the ability ...View the full answer

Principles of Finance

Students also viewed these Corporate Finance questions