### How a firm determine its optimal capital structure

Assignment Help Financial Management
##### Reference no: EM13768223

1) How a firm determine its optimal capital structure. Explain how they do it.

2) Why might optimal capital structure differ across industries? Explain.

#### Questions Cloud

 Earthquake that creates a physical barrier : Instructions: You will need to write a 1-page lab report using the scientific method to answer the following question: What is the cost of common equity : The current T-bill rate is 3%. The market return is 9%. The company has a beta of 2. What is the cost of common equity? What is the total capital the company raised : A company has 30K units of bond with a par value of \$1,000 per unit. The bond is selling at 100% of par value. What is the market value of debt? What is the total capital the company raised? Discuss beneficial impacts and negative effects of piracy : Summarize the information found in the articles in 4 full paragraphs. The blog entry should discuss the beneficial impacts and negative effects of the topic, it shouldn't be a review of the articles. The articles are used to find fact-based inform.. How a firm determine its optimal capital structure : How a firm determine its optimal capital structure. Explain how they do it. Why might optimal capital structure differ across industries? Explain. Brokerage account-time to reach a financial goal : You have \$44,524.78 in a brokerage account, and you plan to deposit an additional \$4,000 at the end of every future year until your account totals \$270,000. You expect to earn 12% annually on the account. How many years will it take to reach your goa.. Finding the required interest rate : Your parents will retire in 20 years. They currently have \$320,000, and they think they will need \$2,500,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? Time for a lump sum to double : If you deposit money today in an account that pays 6% annual interest, how long will it take to double your money? Round your answer to two decimal places. Big foam company stock and dividend : The Big Foam Brewery Company has 30,000 shares of \$10 par value common stock authorized and 20,000 shares issued and outstanding. On August 15, 2012, Big Foam Brewery Company purchased 1,000 shares of treasury stock for \$16 per share. Big Foam Bre..

### Write a Review

#### Why do firms purchase other corporationsdo firms pay too

many corporate acquisitions result in losses to the acquiring firms stockholders. a coworker has asked you to explain

#### What contribution bond

You have the following bond: \$1000 Par, 22 years to maturity, Mkt rate of 9.75%, coupon of 10.25%, compounded semi-annually. The PV of the bond is \$1044.97. What contribution to this \$1044.97 does the coupon payment 27 periods from today make to this..

#### What is the effective annual rate on this loan

You want to buy a new sports coupe for \$73,900, and the finance office at the dealership has quoted you a loan with an APR of 6.3 percent for 72 months to buy the car. What will your monthly payments be? What is the effective annual rate on this loan..

#### Increasing steadily due to increasing demand

Due to increasing value of the Yuan the Chinese electronics manufacturers have been suffering losses. At the same time the cost of a rare-earth mineral used in production of their goods has been increasing steadily due to increasing demand. You have ..

#### Bond valuation-longer-term bonds price

An investor has two bonds in his portfolio that both have a face value of \$1,000 and pay a 8% annual coupon. Bond L matures in 19 years, while Bond S matures in 1 year. Assume that only one more interest payment is to be made on Bond S at its maturit..

#### Common concern in producing accurate research results

Bias (or systematic error) is a common concern in producing accurate research results. What can the researcher to do to solve this problem? A: Interpret results along with bias B: strive to minimize or eliminate bias C: Ignore the Bias D: Pursue samp..

#### Short sale margin calculations

You sell short 300 shares of Microsoft which are currently selling at \$30 per share. You post the 50% margin required on the short sale. The broker requires a 30% maintenance margin.

#### What is the value of the bondholders call option

A 10-year maturity convertible bond with a face value of \$1,000 and a 6% coupon on a company with a bond rating of Aaa is selling for \$1,050. The bond pays interest annually. Each bond can be exchanged for 20 shares, and the stock price currently is ..

#### What is the total cost at time zero of accepting

Your firm is considering a new product development. an outlay of \$90,000 is required for equipment, and an additional net working capital of \$5000 is required. the project is expected to have a 4 year life, and the equipment will be depreciated on a ..

#### What is the subscription price

Keira Mfg. is considering a rights offer. The company has determined that the ex-rights price would be \$66. The current price is \$80 per share, and there are 42 million shares outstanding. The rights offer would raise a total of \$70 million. What is ..

#### Real listing for an auction of a commercial property

We have a real listing for an auction of a commercial property. It is 100% occupied and is 4,000 square feet with 500 additional square feet that can be finished in the attic. The property generates \$5,112 a month and has 7 total units.

#### Portfolio manager of the delaware fund

Assume that you are the portfolio manager of the Delaware Fund, a \$4 million mutual fund that contains the following stocks: Stock Amount Beta A \$ 400,000 1.50 B \$ 600,000 0.50 C \$1,000,000 1.25 D \$2,000,000 0.75. The required rate of return in the m..