Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(DEBT CAPACITY/DEBT COLLATERAL/ DEBT CHARCTERISTIC) (DECREASE/INCREASE) (MORE/LESS) (CONCERVATIE/AGRESSIVE) 2. The target capital structure bring about this target and/or optimal structure will have consequences for the

image text in transcribed(DEBT CAPACITY/DEBT COLLATERAL/ DEBT CHARCTERISTIC)

image text in transcribed(DECREASE/INCREASE)

image text in transcribed(MORE/LESS)

(CONCERVATIE/AGRESSIVE)

2. The target capital structure bring about this target and/or optimal structure will have consequences for the firm's performance and characteristics, including its riskiness, profitability, and even its visibility in the financial markets. When discussing the amount of debt financing employed in a firm's optimal capital structure, it is customary to refer to it as the company's Using more debt will the risk borne by stockholders. As a firm's tax rate decreases, it becomes advantageous for the firm to take on additional debt. manager would be more likely to use debt in an effort to boost his firm's profits

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financing California Real Estate Spanish Missions To Subprime Mortgages

Authors: Lynne P. Doti

1st Edition

184893601X, 978-1848936010

More Books

Students also viewed these Finance questions

Question

=+7 How has the COVID-19 pandemic impacted the operations of IHRM?

Answered: 1 week ago