Question
1. A limitation of the Degree of Financial Leverage formula is that we assume the cost of debt (interest) will remain constant as a firm
1. A limitation of the Degree of Financial Leverage formula is that we assume the cost of debt (interest) will remain constant as a firm borrows more and more. True or false?
2. A company with predictable cash flows (a utility company) is better suited to use more debt in their capital structure than a company with fluctuating, unpredictable cash flows (an automobile company). True or false?
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The Emerging Markets Handbook
Authors: Pran Tiku
1st Edition
0857192981, 978-0857192981
