Is debt good for a company? Why or Why not?

Q: How can I tell if a company is financed by debt or equity?

A: here you need to know what is debt and equity debt means you're borrowing money from an outside…

Q: What are some factors to consider in evaluating a company's ability to make payments on outstanding…

A: the factors list are net income:- the company will earn profit over its sales and make its…

Q: an you think of certain types of businesses/industries wherein a high amount of debt is typical and…

A: Introduction : In simple words, debt refers to the form of capital in which the company issues fixed…

Q: Is it true that the book value of a company equals the value or it's assets according to their…

A: Book value of the firm is the value of its liquidating i.e the total amount when its assets are sold…

Q: What are the possible actions when a business becomes insolvent?

A: Insolvency occurs when a person or business is unable to service the debt to lenders as debts come…

Q: What are the options available to a company in the event of a financial failure?

A: Overspending and a more considerable degree of illiquid assets might lead to the firm's financial…

Q: Why does a Chief Financial Officer need to know their company's cost of equity?

A: A chief financial officer is one of the  top-level executive. The CFO is a financial controller who…

Q: Can a company be profitable but not liquid? Explain.

A: Liquidity: It can be defined as the ease or quickness with which the short term assets of a company…

Q: What is Debt financing? What are the major sources of corporate financing?

A: Corporate finance is the domain of finance concerned with how companies cope with financing sources,…

Q: To what extent a company uses debt financing (or financial leverage) in business operations?

A: The question is based on the concept of capital structure of a company, the capital structure is a…

Q: Which of the following is primarily interested in the liquidity of a company? O Long-term creditors…

A: Liquidity of the company means short term debt paying capacity of the business. It means how much a…

Q: Explain the advantages and disadvantages of the use of debt to a company

A: Debt - Debt is a source of fund to a company on which company pay an annual fixed payment. and that…

Q: Why are the costs of selling equity so much larger than the costs of selling debt?

A: The Debt and Equity are part of capital structure of a company. Cost of equity is the minimum…

Q: types of Corporate finance? What are the elements of Corporate

A: Step 1 Business finances play an important role in all businesses. Regardless of the size or type of…

Q: is it possible for a company to expand itself out of existence, and how can this be avoided as a…

A: Introduction : When a company goes out of existence and shuts down its operations, it is stated that…

Q: Why is corporate finance important to stakeholders?

A: Corporate finance generally deals with the sources of funding i.e the entity's capital structure. It…

Q: What allows financial institutions to generate a profit? What are the conditions under which their…

A: THE INTRODUCTION: The marketplaces where financial assets and instruments are traded and the sites…

Q: How can a company expand itself out of existence, and how can this be avoided as a financial…

A: Introduction: Finance managers are accounting professionals who are concerned with the financial…

Q: Why are the costs of selling equity for a corporation so much larger than the costs of selling debt?

A: Introduction Debt and Equity are part of the capital structure of a company. The cost of equity is…

Q: When analyzing a company's financial report, what are the most likely indicators that a company is…

A: A tax is a financial charge imposed by government. It is a source of income for the governments to…

Q: a. What is the company's total book value of debt? b. The total market value? c. What is your best…

A:

Q: What does issuing equity instea of debt signal about the financial health of a company?

A: Debt signaling is a theory which helps in determining the movement of stock prices. When a company…

Q: a. What is the cost of equity of each companies? b. What is the after tax cost of debt of each…

A: The Cost of equity: The required rate of returns that shareholders expect from holding a company's…

Q: Discuss how Floating and Fixed debentures affects the profitability of a business?

A: In floating debentures the interest rate of such debentures change will the level of changes... Such…

Q: of businesses/industries wherein a high amount of debt is typical and considered a

A: Many business or institution have high debt due to nature of business.

Q: What are some reasons that a company might choose common stock as means of financing their business…

A: Common Stock Common stock represents the ownership of a corporation by its stockholders. It allows…

Q: Companies borrow because it is in their best interests financially.

A: The given statement is True..... Companies borrow because it is in their best interests…

Q: Under what assumptions market value of a company does not depend on its capital structure

A: One important concept in Modigliani and Miller theorem that market value does not depends on the…

Q: If you are a company owner, which one you choose debt financing, equity financing or a combination…

A: Finance is very important to run a business. It is very necessary to have finance to conduct day to…

Q: a company is more likely to be considered solvent if it has a ____ debt-equity ratio and a _____…

A: A lower debt-equity ratio indicates that a firm has a low value of debt in comparison to its equity.…

Q: Why do the companies in high tax brackets incur lower after-tax interest costs by financing through…

A: Debts are the liability issued by the company to raise funds. The debt holder receives fixed…

Q: 1. The debt to assets ratio is one of the analysis tools used to evaluate the impact of debt holding…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Explain what "financial distress" means. Let's say that a company is in financial difficulties, and…

A: Introduction: Financial Distress is defined as a scenario in which a company's obligations, such as…

Q: How can the use of debt serve to discipline managers?

A: A debt in a capital structure is a liability for the company on which company is bound to earn as…

Q: Debt interest is a _______expense that is particularly important for companies with high tax rates.

A: Introduction: Debt financing is a financing wherein money is borrowed by an individual or an…

Q: What actions do companies typically take to meet the large debt burdens resultingfrom LBOs?

A: Leverage buyout could be a kind of trade procurement with a huge sum of obligation. For the most…

Q: Which is more favorable for a business - huge debts or small debts? Justify your position

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: The difference between equity financing and debt financing is that a. equity financing involves…

A: Equity refers to the value representing the shareholders of the company. It is the amount which…

Q: What is the Role of Corporate Finance? What are the Functions of Corporate Finance?

A: Corporate Finance: Specifically, corporate finance is the field of finance that deals with sources…

Q: n as a remedy for agency costs and -problems, and therefore create value in companies. However, in…

A: Debt are important source of capital but too much debt will create problems.