Long term debt to provide working capital

Assignment Help Financial Management
Reference no: EM13941731

Generally it is not wise to use

a. Long Term Fixed Interest Debt to finance long term assets such as plant and equipment

b. Short Term Debt in a rising interest environment to finance long term assets

c. Long Term Debt to provide Working Capital

d. Short Term Debt to finance short term assets

Reference no: EM13941731

Questions Cloud

Determine whether this is a necessary attribute : Determine whether this is a necessary attribute for all employees who work for domestic-based companies and multinational companies or just for top executives of these companies.
What is the aftertax cost of debt-pretax cost of debt : Mudvayne, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 12 years to maturity that is quoted at 104 percent of face value. The issue makes semiannual payments and has an embedded cost of 10 percent annually...
Classical and humanistic perspectives of work : Compare and contrast the classical and humanistic perspectives of work using two examples from popular media reports (e.g., magazine or newspaper articles, journal case studies, stories, blogs, websites, etc)
What are political or social goals of this terrorist group : What do Al Qaeda's motives classify the group into-Exotic Terrorism, Religious Terrorism, International Terrorism, Gender-selective Terrorism, Criminal Dissident Terrorism, or a combination of various types of terrorism? How? Explain your reasonin..
Long term debt to provide working capital : Generally it is not wise to use-Long Term Fixed Interest Debt to finance long term assets such as plant and equipment. Short Term Debt in a rising interest environment to finance long term assets. Long Term Debt to provide Working Capital
Perpetual preferred stock sells : Klieman Company's perpetual preferred stock sells for $90 per share and pays a $7.50 annual dividend per share. If the company were to sell a new preferred issue, it would incur a flotation cost of 5.00% of the price paid by investors. What is the co..
Current taxation ruling about a specific concept : You are required to choose a current taxation ruling about a specific concept/issue that we address in this unit ACC00717. Your ruling must be different to other students.
Use the gordon growth model or the perpetuity model : Use the Gordon growth model or the Perpetuity Model, as applicable, to find the value of each firm as follows, or explain why you cannot use either valuation method for a given firm if neither can be used:
Analyze the effectiveness of the steps to change culture : Choose a company where the culture is important and describe what this company did to change the culture to make it better overall, not just a better place to work, but financially as well. Analyze the effectiveness of the steps to change culture

Reviews

Write a Review

Financial Management Questions & Answers

  Marital deductions as it relates to the estate tax

Explain and discuss the marital deductions as it relates to the estate tax. Give some examples of why or why not it should be used.

  What coupon interest rate must the company set on the bonds

Preissle Company, wants to sell some 20-year, annual interest, $1,000 par value bonds. Its stock sells for $42 per share, and each bond would have 25 warrants attached to it, each exercisable into one share of stock at an exercise price of $47. The f..

  Estimate the cost of equity

Caballos, Inc., has a debt to capital ratio of 27%, a beta of 1.26 and a pre-tax cost of debt of 6.8%. The firm had earnings before interest and taxes of $ 515 million for the last fiscal year, after depreciation charges of $ 292 million. Assume that..

  About the coupon bonds-bonds mature

LKD Co. has 11 percent coupon bonds with a YTM of 9.5 percent. The current yield on these bonds is 9.9 percent. How many years do these bonds have left until they mature?

  Firms residual or common value currently worth

Suppose that a firm has, as of this year, an Earnings Before Interest and Taxes of $117 million, Depreciation of $10 million, has bought $25 million in machinery, has sold $12 million in old machinery for cash, has had an increase in Accounts Receiva..

  Explain what is the yield to call ytc for this bond

Call protection for the next 10 years, and a call premium of $25. What is the yield to call (YTC) for this bond if the current price is 110 percent of par value?

  Expand production capacity

A manufacturing company is purchasing a new machine for $380,000 to expand its production capacity. It will cost an additional $30,000 to do the site preparation. With the new machine installed, the company expects to increase its revenue by $91,000 ..

  Calculate the rate of return we make per annum

We have a stock Bottine and Despotakis (A&D) which we buy for $10. We keep it for 6 years at which point we sell it for $25. During the six year period, it pays us $12 which we reinvest at 5% annual return. Calculate the rate of return we make per an..

  What was last years dividend per share

After a 5-for-1 stock split, Strasburg Company paid a dividend of $.75 per new share, which represents a 9% increase over last year's pre-split dividend. What was last year's dividend per share?

  At what price per jar would project npv equal zero

EMperor’s Clothes Fashions can invest $5 million in a new plant for producing invisible makeup. The plant has an expected life of 5 years, and expected sales are 6 million jars of makeup a year. Fixed costs are $3.8 million a year, and variable costs..

  Assume interest rate parity holds

Assume interest rate parity holds, and the current six-month risk-free rate in the United States is 1.43 percent. The six-month risk-free rate in Great Britain, Japan, and Switzerland must be ___percent, ___percent, and ___percent, respectively.

  What is your dollar profit if platinum sells

The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $1,265 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is you..

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