Question
I need answer to this questions: Determining the Financing Mix The balance sheet of the firm is (Assets = Debt + Equity). Since every asset
I need answer to this questions:
Determining the Financing Mix
The balance sheet of the firm is (Assets = Debt + Equity). Since every asset is financed by debt or equity per the equation, every firm needs to choose what proportion of debt and equity it wished to pursue to "capitalize" the firm. Here is a simplified example of how this works -Do you work for a large firm or know someone who does? How could you find their financing mix? What are some red flags you should be on the lookout for? -Have you heard of any accounts of workers losing their jobs due to their firm going out of business? Are there any financial or management lessons which could be learned from their failure? -Do you think there are advantages to issuing more debt? Why or why not? -If you were to open your very own new business currently what kind of financing mix would you prefer and why?
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