User Account

All Pages

Maintain a constant debt ratio dv

Assignment Help Finance Basics
Reference no: EM131751184

The WACC formula assumes that debt is rebalanced to maintain a constant debt ratio D/V. Rebalancing ties the level of future interest tax shields to the future value of the company. This makes the tax shields risky. Does that mean that fixed debt levels (no rebalancing) are better for stockholders.

Reference no: EM131751184

Questions Cloud

Discuss the company paid total cash dividends : The company paid total cash dividends of $6,500 in its first year of operation
Dividend payout ratio be this year : If the company's debt-to-asset ratio is 50 percent, what will its dividend payout ratio be this year?
Find mean amount bet on major league baseball games : Is there any evidence to suggest that the mean amount bet on Major League baseball games has increased? Assume the distribution is normal and use a = 0.05.
Create an external factor analysis table for the company : Create an external factor analysis (EFAS)table for the company you researched. Use Microsoft Word, or a similar program, to create your table.
Maintain a constant debt ratio dv : The WACC formula assumes that debt is rebalanced to maintain a constant debt ratio D/V. Rebalancing ties the level of future interest tax shields to the future
How much is your monthly payment : You have decided to buy a car for $34,700 and finance it at 5.36% for 36 months.
Analyze media availability to determine costefficient method : Analyze media availability to determine cost-efficient methods of communicating with potential students within the country and within the geographic region.
Term coverage now and becomes uninsurable : If a person buys term coverage now and becomes uninsurable, what are the alternatives for dealing with a potential business continuation problem?
What was the major reason for employees loyalty : In the past, many workers chose to stay with their employer until retirement. What was the major reason for employees' loyalty?

Reviews

Write a Review

Finance Basics Questions & Answers

  Compute the future value of this cash flow stream

Compute the future value of this cash flow stream. Do not enter the symbol $ in your answer. Simply enter the answer rounded off to two decimal points.

  Approach versus the other

One of the key issues in valuation is whether to value just the equity portion of a firm or to value the entire enterprise. What are the arguments on both sides of this issue. Again, discuss what types of companies/situations might be best suited ..

  Asume riskiness of stock decrease which causes required

california clinic an investor-owned chain of ambulatory care clinics just paid a dividend of 2 per share. the firms

  Find the expected return and standard deviation

Ebenezer Scrooge has invested 60 percent of his money in share A and the remainder in share B. He assesses their prospects as follows:

  Question regarding the free cash flow

Based on what you discovered in the e-Activity, determine how the company you selected should address its free cash flow, either through distributions to shareholders or repurchasing of stock. Explain your rationale.

  Identify which is more risky bonds or common stocks

Explain the relationship between risk and return. Identify an example of risk and return. Explain which is more risky bonds or common stocks.

  Priority would common stockholders have

Assume that a firm had such serious financial problems that it was about to be liquidated after a bankruptcy. All of the firm's assets are about.

  Explain how exchange rate exposure may create risks and

explain how exchange rate exposure may create risks and opportunities for domestic and multinational firms.use

  Describe the main factors in the rtc securitization flow

Describe the main factors in the RTC securitization flow of funds process AND explain how the securitization of receivables benefits the issuer. Does the existence of prepayments on mortgaged backed securities make them more or less risky to the i..

  By how much does the required return on the riskier stock

stock r has a beta of 1.2 stock s has a beta of 0.85 the expected rate of return on an average stock is 10 and the

  How much would these bonds sell for today

Assume that Brady Corp. has an issue of 18-year $1,000 par value bonds that pay 7% interest, annually. Further assume that today's required rate of return on these bonds is 5%. How much would these bonds sell for today? Round off to the nearest $1

  Volatility and return characteristics of large stocks

Define and discuss the volatility and return characteristics of large stocks versus large stocks and bonds and what affects they have on pricing risk? Give examples to support your answer.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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