Straight debt and equity have very different payoff structures. Debt holders get paid "first", but only up to the amount they are owed. Equity holders get paid "last", but essentially get all the upside after the debtholders' obligation has been satisfied. Group of answer choices True False

Straight debt and equity have very different payoff structures. Debt holders get paid "first", but only up to the amount they are owed. Equity holders get paid "last", but essentially get all the upside after the debtholders' obligation has been satisfied. Group of answer choices True False

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 24MCQ: When analyzing a companys debt to equity ratio, lithe ratio has a value that is greater than one,...

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The cost of debt is normally higher than the cost of equity. Is it a good idea to always carry a debt load as great as possible so that ROE will be higher. Do you agree? Why or why not?
Select all that are true with respect to the cost of debt. Group of answer choices it is the return the firm needs to earn overall to satisfy all investors It is the rate the debt holders demand given the risk they face as debt holders Can be estimated using CAPM Cannot be estimated using CAPM because CAPM is used for estimating the cost of equity Is always equal to the YTM on a company's existing bonds Is lower than the YTM on a company's existing debt if there is default risk Can be proxied by the YTM on a company's existing debt if the debt is risk free Flag question: Question 7
The difference between equity financing and debt financing is that Group of answer choices A. equity financing involves borrowing money. B. debt financing involves selling part of the company. C. debt financing means the company has no debt. D. equity financing involves selling part of the company.
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it say all answers above are incorrect, i need the yield on the debt percentage plz and thank u