Cash flows to cover interest payments

Assignment Help Financial Management
Reference no: EM131066323

If a firm believes that it will have sufficient cash flows to cover interest payments, it may consider using ____ debt and ____ equity, which implies a ____ degree of financial leverage.

a. more; less; lower

b. more; less; higher

c. less; more; higher

d. none of the above

Reference no: EM131066323

Questions Cloud

Convert from preferred to common stock : Convertible preferred stock Valerian Corp. convertible preferred stock has a fixed conversion ratio of 4 common shares per 1 share of preferred stock. The preferred stock pays a dividend of $7.00 per share per year. What factors might cause an invest..
Develop a spreadsheet model that could be used to assist : Develop a spreadsheet model that could be used to assist Tim with retirement planning
How can some risk be relevant and some risk not relevant : Provide a definition of risk using your own words. How does this definition apply to finance? How can some risk be relevant and some risk not relevant? Why are there more than one measure for risk regarding stock?
How problematic have these issues made it for you at home : If you checked off any difficulties, how problematic have these issues made it for you at home, work, with other persons?
Cash flows to cover interest payments : If a firm believes that it will have sufficient cash flows to cover interest payments, it may consider using ____ debt and ____ equity, which implies a ____ degree of financial leverage.
Decide between two different conveyor belt systems : Lang Industrial Systems Company ( LISC) is trying to decide between two different conveyor belt systems. System A costs $ 240,000, has a four- year life, and requires $ 75,000 in pretax annual operating costs. Whichever project is chosen, it will not..
Draw an entity-relationship diagram for this database : Draw an Entity-Relationship diagram for this database using UML notation. Be sure to include all the entities mentioned above, together with attributes (including primary key attributes), relationships and multiplicity constraints
How much of new investment must be financed by common equity : On January 1, the total market value of the Tysseland Company was $60 million. During the year, the company plans to raise and invest $25 million in new projects. The firm's present market value capital structure, shown below, is considered to be opt..
Assesses employee strengths and weaknesses : What are some of the problems that can occur for management, as well as, employees, if you currently have an appraisal system, which assesses employee strengths and weaknesses once a year and employees do not have a way of improving their performa..

Reviews

Write a Review

 

Financial Management Questions & Answers

  Forecasts of fantastics financial statements

Preparing monthly forecasts of Fantastic's financial statements and monthly cash budgets for 1981 and 1982

  Least-expensive car for your new delivery service

You are trying to pick the least-expensive car for your new delivery service. You have two choices: the Scion xA, which will cost $21,000 to purchase and which will have OCF of –$2,600 annually throughout the vehicle’s expected life of three years as..

  Explain some of the major tactics of sovereign debt relief

Explain some of the major tactics of sovereign debt relief. Make sure you talk about debt restructuring, debt-cartel, debt-for-nature swap, debt-for-equity swap etc.

  They have to save each year to reach their goal

Assume that your parents wanted to have $160,000 saved for college by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 11.5% per year on their investments. How much wo..

  Find the current yield of a bond

Find the current yield of a bond that returns 4% annually and matures in 6 years. Similar bonds in Today’s market are returning only 3% annually.

  The expected return on the market portfolio

The expected return on the market portfolio is 17 percent, and the return on the risk-free security is 5 percent. What is the expected return on a portfolio with a beta equal to 0.5?

  Prepared to make equal annual deposits into the account

You want to have $85,000 in your savings account 13 years from now, and you’re prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.30 percent interest, what amount must you deposit each year?

  Calculate the operating cash flows for the new project

(Calculating operating cash flows) Assume that a new project will annually generate revenues of $2,600,000 and cash expenses, (including both fixed and variable cost) of $900,000, while increasing depreciation by $210,000 per year. In addition, l the..

  Value of six-month european call option with strike price

A futures price is currently 100. At the end of six months it will be either 112 or 90. The risk-free interest rate is 5% per annum. What is the value of a six-month European call option with a strike price of 100?

  About how much the return of apple stock

Mr. Moore is thinking about how much the return of Apple stock could be given it's beta of 1.11 for a possible investment he wants to make. Other data you have collected: the rate of return on 90 day T-Bills is 1.5%, on 5 year T-Notes it 3% and on th..

  Cash flows over the four-year life of the investment

An investment has an installed cost of $518,800. The cash flows over the four-year life of the investment are projected to be $230,850, $247,450, $214,110, and $162,820. At what discount rate is the NPV just equal to zero? If the discount rate is zer..

  Case study new modes of trade finance trade finance in the

case study new modes of trade finance trade finance in the twenty-first century plug and pay?palate-able delights pad

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd