What is a firm’s fundamental value (which is also called it intrinsic value)? What might cause a firm’s intrinsic value to be different from its actual market value?

Q: What’s the risk of competition on financial markets and institutions profitability?

A: Competitive risk or Risk of Competition is the force that will hinder the organization in achieving…

Q: One of the indirect costs of financial distress is having to sell assets at lower than market value.…

A: Indirect costs of financial distress is not the directly present cost in the financial statements…

Q: The financial leverage implications for company analysis?

A: 1. Financial Leverage: To finance the New Assets management borrowed money. it is called financial…

Q: operating

A: Operating leverage is a leverage which helps us to know the cost structure of a company & also…

Q: What does it mean for a financial market to be considered (a) informationally efficient and (b)…

A: The financial market is a market where investors and traders buy and sell securities at a low price…

Q: If a firm could maximize either its current market price or its intrinsic value, whatwould…

A: Answer: Managers should focus on maximizing the intrinsic value. The intrinsic value increases…

Q: How does extent of rivalry among competitors affect the investment industry sector?

A: Here we are supposed to elaborate the degree to which the rivalry among the competitors affects the…

Q: How does added debt potentially decrease the value of a firm?

A: Debt can be positive as well as negative, firms prefer to use debt in their capital structure to…

Q: How do profit potential and legal considerations affect a firm’scredit policy?

A: It refers to the policy which states interest rate and duration that are relevant to the funds…

Q: Why is a firm’s value maximized if it invests to the point where its marginal return onnew…

A: The firm’s value is maximized when the Marginal return on new investment is equal to the kc because…

Q: How can an unlevered firm uptain financial leverage

A: Unlevered firm is a firm with no debt in its capital structure. It does not have any financial…

Q: capital controls, which investment would you choose? What are the risks associated with this trade?

A: The United States has always been ranked among the best in the world for its competitiveness and…

Q: Why is FCF an important determinant of a firm’s value?

A: The cash available with a firm after paying operating expenses and capital expenditure of the firm…

Q: What are the possible actions that a firm can take if it experiences a financial failure?

A: Financial failure of the firm could be resulted because of overspending, higher degree of illiquid…

Q: Does GAAP distinguish between fair values that are readily determinable from current market prices…

A: Generally Accepted Accounting Principles (GAAP):  A set of accounting principles, practices and…

Q: How will a company view working capital – positive, negative, or a necessary evil?

A: The difference between current assets and current liabilities is used to calculate working capital.…

Q: How can you estimate the business risk of a firm?

A: Beta is the systematic risk. As a company opts to make decision to the best of interest, it is…

Q: What do you meant by not for profit objective of the firm?

A: The sole purpose of any business organization is to earn profit. However, there are some…

Q: What might cause a firm’s intrinsic value to be different from its actualmarket value?

A: Intrinsic Value is one of the vital component used in valuation of a particular company. Intrinsic…

Q: What are the best two measures for the profitability of firms that are not publicly traded?

A: Profitability, rate of return, as well as the pre-tax income are all metrics that would be used to…

Q: The wealth maximization objective of a firm is superior to its profit maximization objectives.Do you…

A: The primary objective of every firm is to maximize its profit. Wealth maximization is the broader…

Q: What could possibly go wrong while using financial leverage? Do you think it should be utilized by a…

A: Financial leverage: Financial leverage is a word that describes the use of borrowed money (debt) to…

Q: In theory, should a firm be equally concerned with stand-alone,corporate, and market risk? Would…

A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…

Q: What can you say about the market value of the company? is it positve or is negative?

A: In finance market value of a company is the worth of the company and the worth of the company is…

Q: What is one classification scheme that firms often use to obtain risk-adjusted costsof capital?

A: The question is based on the concept of risk-adjusted costs of capital with consideration of…

Q: If a company chooses to minimize WACC, what will be the effect on financial flexibility

A: Basic Terms :- Financial flexibility of the firm is the ability of the firm's capital structure to…

Q: Can the retiring strategy of a firm jeopardize its profitability? Explain and provide examples of…

A: Retirement planning doesn’t mean one must most effective give attention to their finances.…

Q: Does capital structure influence the value of a firm? Why or why not?

A: The capital structure refers to the combination of different sources of capital in the capital base…

Q: What is a firm’s fundamental value (which is also called its intrinsic value)?

A: The intrinsic value is also called as the fundamental value. It is the calculation of the worth of…

Q: How does the value of a levered firm compare to the value of anunlevered firm that is otherwise…

A: When the company having debt in its capital structure it is referred to as a levered firm. When the…

Q: why do firms use non financial measures

A:

Q: How financial synergy impact the firm's value

A: Financial Synergies: Financial Synergy happens at the joining of two businesses increases financial…

Q: What does the term “value of an unlevered firm” mean?

A: A firm is an organization that sells or produces something or that offers a service.

Q: What are the advantages/disadvantages of using the market multiples method to estimate the value of…

A: It is a valuation strategy that decides the distinctive market values for similar organizations.…

Q: er confirmatory value?

A: Predictive value : The knowledge has predictive value, which implies it may be utilised to forecast…

Q: t are the main hindrances in valuation estimates in business valuation?

A: Knowing how much an asset is worth and what factors influence its value is essential for making…

Q: What is the risk-return tradeoff that arises when a firm manages its working capital? Give tangible…

A: Risk is referred as the probability or chance, which has an outcome or actual gains of an…