Factors of capital structure, Finance Basics

Assignment Help:

Factors of Capital Structure

1. Availability of securities - This influences the company's employ of debt finance that means such if a company has enough securities, so then it can afford to employ debt finance in large capacities.

2. Cost of finance as both explicit and implicit - If low, so a company can employ more of debt or equity finance.

3. Company gearing level - if high, so then the company may not be capable to employ more equity or debt finance since potential investors would not be willing to invest in that a company.

4. Sales stability - If a company has stable sales so like profits, it can afford to utilize various finances in particular debt in such far as it can service like finances.

5. Competitiveness of the industry whether the company operates - If the company operates in a highly competitive industry, hence it may be dangerous to utilize high levels of debt since chances of servicing this debt may be lead and may low a company in receivership.


Related Discussions:- Factors of capital structure

Determine tax cash flows & irr, An industrial engineer proposed the purchas...

An industrial engineer proposed the purchase of a RFID Fixed Asset Tracking System for the company's warehouse and weave rooms.  The engineer though that the system would provide a

Social responsibility - objectives of business entity, Social responsibilit...

Social responsibility - Objectives of Business Entity The firm must decide where to operate strictly in their shareholders' best interests or be responsible to their staff, th

Compute the black-scholes price of one reverse convertible , Instructions ...

Instructions 1 This case study counts as part of your group project. 2 Project Group: You must complete this assignment together with the group that you initially registered

Fiscal function, should be provied on a centralised or a decentralised basi...

should be provied on a centralised or a decentralised basic?

Capital market authority (cma), Capital Market Authority (CMA) Was est...

Capital Market Authority (CMA) Was established in 1990 with an Act of Parliament to assist, in creation of a conducive environment, for growth and development of capital marke

Find the no-arbitrage cost of the european call option, Question: Suppo...

Question: Suppose that a security is presently selling for a price of $65, the nominal interest rate is 8%, and the security volatility is 0.15. a) Determine Delta of a Euro

End of Chapter Problems, The Audiology Department at Randall Clinic offers ...

The Audiology Department at Randall Clinic offers many services to the clinic''s patients. The three most common , along with cost and utilization data, are as follows: Service Var

Finance 504, What role do primary financial markets play in our economy? Wh...

What role do primary financial markets play in our economy? What role do secondary markets fill? Describe the relationship that exists between financial institutions and financial

Write Your Message!

Captcha
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