Why is financial leverage understood to be a fair-weather friend?

Q: What do you mean about the net worth of a cooperative?

A: Net worth: It is the amount of the assets that a company or a person holds minus liabilities they…

Q: Is it financial expediency for firms to borrow?

A: The acquisition of debt funds by businesses is far more convenient than any form of funds and far…

Q: What is meant by a banker’s acceptance?

A: Money market instruments refers to financial instruments whose maturity period lies between 30 to…

Q: What role do interest rates play in allocating capital to different potential borrowers?

A: Rate of interest : It is the amount paid by a borrower to use the capital borrowed from the…

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: What do you see as some of the possible problems if shareholder value is seen as a strategy (and not…

A: Strategy refers to the financial approach for the planning of the functions that are based on a…

Q: What are some advantages and disadvantages of top-down versus bottom-up investing styles?

A: Top-down investing and bottom up investing procedures are the procedures used in different type of…

Q: Does a firm's social presence need to be considered before an individual decides to invest? Why, or…

A: Investment means engaging your funds to generate income for the future. Before investing, various…

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: When owners use financial leverage, they transfer part of their risk to

A: Question 44: Option e Question 45: Option d

Q: What in non trading concerns and what are the advantage

A: Non Trading Concerns or Not-for-profit organizations are those which exist for the betterment of…

Q: Debt also can be an advantage. How can be a debt can be advantage?

A: Debt Financing:   It is the money borrowed by the business from outside sources. This source of…

Q: What can go wrong with financial leverage? Should it be used at all by a business?

A: Financial leverage refers to a term that tells us the use of money which one borrowed means the debt…

Q: what differentiates a superior investment manager from an inferior one?

A: 1. Superior investment managers are having a better degree of control over their emptions in…

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: hat is the essential job of an investment banker?

A: Investment banker helps corporations or individuals to raise capital and also they provide financial…

Q: Why is financial leverage is attractive

A: Introduction : In simple words, financial leverage refers to the process in which a company buys…

Q: Describe how financial leverage can increase return on owners’ equity.

A: Introduction: In finance, leverage is a general concept to combine gains and losses by some…

Q: Why securitisation may be very beneficial for both institutions and investors ?

A: explanation Securitization is beneficial because it provides possibilities for investors while also…

Q: Is maximizing shareholder value inconsistent with being socially responsible?Explain.

A: Maximizing the shareholder's value is the highest goal for any organization as they are the owners…

Q: How one determines where to borrow or not? What factor into the decision making process?

A: The act of borrowing money or the sum of money borrowed by an individual, company, government, or…

Q: Suppose your firm raises funds from outside lenders. What type of agency costs might occur? How…

A: Agency cost is the internal cost that arises internally within the firm. It can happen due to peer…

Q: Why are people willing to pay financial intermediaries their transaction costs, at our expense?

A: The question is based on the concept of function and operation of intermediaries in financial…

Q: Explain an accredited investors?

A: An accredited investor is a person or entity who is allowed to deal, trade and invest in financial…

Q: Compare and contrast the individual investor and the institutional investor.

A: Individual investors and Institutional investors: In simple words, Individual investors are those…

Q: Why should an investor consider investing globally?

A: Investing globally has frequently been the guidance given to investors hoping to build the…

Q: What is securitization? What are its advantages to borrowers?What are its advantages to lenders?

A: Securitization is a financial process that takes an asset of some kind and turns it into a security,…

Q: What are the gains and purposes of being a neutral investor?

A: The investor earns profit in case of both price increases as well as decreases in a market and…

Q: What are the advantages to borrowers and risks to lenders for each?

A: Borrowers are the people who borrows the money for any specific purpose. Borrowers pay some amount…

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: What is the financial advantage (disadvantage) of accepting the outside supplier's offer?

A: Make or buy decision: It is the decision made by the company to manufacture the product or buy it…

Q: fair value gain? And what effect it has on Balance sheet?

A: The balance sheet includes the assets, liabilities, and stockholders' equity of the company.

Q: The relationship between value and its expression in the form of money reflects in a transparent way…

A: Correct answer is (a) True.

Q: Why is granting credit riskier in an international context?

A: The term credit refers to selling goods on credit by the business top its customers i.e. instead of…

Q: What factors contribute to the risk of overusing financial leverage?

A: Financial leverage is the use of debt in the capital structure to acquire additional assets. Use of…

Q: What is financial leverage?

A: Capital Structure:   It refers to the combination of debt and equity that constitutes the finances…

Q: What is "constructive receipt doctrine? Discuss What is "economic benefit doctrine? Discuss

A: Constructive receipt doctrine: According to constructive receipt doctrine policy, the taxpayer…

Q: what are the benefits/risks of financial leverage?

A: Financial leverage is a condition wherein a company raises funds through the issue of additional…

Q: What indicates an investor’s ability to significantly influence the decision-making process of an…

A: Investments: Companies invest in stocks and bonds of other companies or governmental entity to…

Q: How financial synergy impact the firm's value

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

Q: why banker acceptance desirable for the exporter?

A: For foreign exchange, the approval of bankers is seen as a way of guaranteeing payment. The letter…

Q: Types of seller financing?

A: Seller Financing: A real estate or property agreement under which the mortgage process is managed by…

Q: Are Financial Analysts Friends or Foes to Investors?

A: There are basically two type of analysts in the investment banking or brokerage companies, these are…

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.