Concepts of business risk and financial risk

Assignment Help Financial Management

Reference no: EM131065612

Explain the concepts of business risk and financial risk. Identify factors that affect each. Explain the concept of financial leverage. Identify advantages and disadvantages of using financial leverage within a company.

Reference no: EM131065612

Questions Cloud

What is the return on assets-what is the return on equity : Keller Cosmetics maintains an operating profit margin of 8.20% and a sales-to-assets ratio of 3.30. It has assets of $540,000 and equity of $340,000. Interest payments are $34,000 and the tax rate is 35%. What is the return on assets? What is the ret..

Debt to long-term capital ratio : A firm has a long-term debt–equity ratio of 0.55. Shareholders’ equity is $1.4 million. Current assets are $425,000, and total assets are $2.420 million. If the current ratio is 1.7, what is the ratio of debt to total long-term capital?

Degree of operating leverage and degree of operating level : Modern Artifacts can produce keepsakes that will be sold for $250 each. Nondepreciation fixed costs are $3,000 per year, and variable costs are $150 per unit. The initial investment of $9,000 will be depreciated straight-line over its useful life of ..

Tax consequences of the liquidating distributions : Anna has a $25,000 basis in her partnership interest when she receives liquidating distributions from the partnership. Anna receives cash of $18,000 and computer equipment with a basis to the partnership of $15,000. What are the tax consequences of t..

Concepts of business risk and financial risk : Explain the concepts of business risk and financial risk. Identify factors that affect each. Explain the concept of financial leverage. Identify advantages and disadvantages of using financial leverage within a company.

What is your estimate of the current stock price : Fincher Manufacturing has projected sales of $146.4 million next year. Costs are expected to be $81.7 million and net investment is expected to be $15.7 million. What is your new estimate of the company’s stock price? What is your estimate of the cur..

What is the value of the new firms debt : Sunburn Sunscreen has a zero coupon bond issue outstanding with a $25,000 face value that matures in one year. The current market value of the firm's assets is $27,200. The standard deviation of the return on the firm's assts is 35% per year, and the..

Major reasons for a manager to understand cost behavior : Which one of the following is not one of the major reasons for a manager to understand cost behavior?

What should be the expected return on the stock : A stock has a 30% chance of returning 5%, otherwise it'll return 13.3%. What is the expected return? A stock has a beta of 1.42. If the risk free rate is 4.6%, and the expected market return is 11.4%, what should be the expected return on the stock, ..

User Account

All Pages