Table 21.1 describes the financial mechanisms that can change capital structures and firm sizes: (a) Debt ratio

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Table 21.1 describes the financial mechanisms that can change capital structures and firm sizes:

(a) Debt ratio increases, firm size decreases: Exogenous value drop, share repurchase, cash dividend.

(b) Debt ratio decreases, firm size decreases: Debt repurchase, principal repayment, debt call.

(c) Debt ratio increases, firm size increases: Debt issue.

(d) Debt ratio decreases, firm size increases: Firm value increase, seasoned equity offering, ESOP share issuance, warrant exercise.

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Corporate Finance An Introduction

ISBN: 9780321277992

1st Edition

Authors: Ivo Welch

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Question Posted: Oct 26, 2024 04:03 AM

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Table 21.1 describes the financial mechanisms that can change capital structures and firm sizes: (a) Debt ratio

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Corporate Finance An Introduction

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