Explain the risk of investing in a company based on

Q: Which of the following businesses are most exposed to interest rate risk? *       A. A company with…

A: Interest means amount needs to be paid on regular basis in exchange of loan amount borrowed.…

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: Financial statement analysis is used to evaluate a firm's liquidity position, solvency position, and…

A: Financial statement analysis is the process of reviewing and analyzing a company's financial…

Q: How can processes, policies and controls related to a company’s finance and investment cycle affect…

A: An internal control are those rules, policies, control and procedure that is implemented by the…

Q: you are an investor how do you assess the financial ratios of the company? And why

A: FINANCIAL ratios are considered to be an important indicator for the companies financial stability…

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: what is the price of company stock? iS IT WORTH TO INVEST IN? EXPLAIN

A: We are given some financial ratios  for 3 consecutive years for a company based on which we need to…

Q: A. Why is the goal of financial management to maximize the current share price of the company's…

A: The answer for the question on the financial management is discussed hereunder : What is Financial…

Q: What is the financial system. And what the markets that the financial system likely includes.…

A: Hello. Since your question has multiple sub-parts, we will solve the first three sub-parts for you.…

Q: what is the relationship between management of business finance and company`s financial performance…

A: Managing Business Finance means to utilize the funds of the business out of various means such as…

Q: What is the blend of long-term financial sources used to finance the firm which may include debt,…

A: Long term financial sources could be debt, equity or preferred stock. The blend of these is required…

Q: what formulas do you use to calculate: -weights of debt, preferred stock, and common stock using the…

A: a) Book Value of debt = Long term debt + Notes Payable + Current portion of long term debt Book…

Q: Why would a company invest in debt or equity securities?

A: Debt securities: The financial instruments which are bought by investors, or corporations, or mutual…

Q: How can the Stock price be a good indicator of your company's financial health and may also reflect…

A: In order to examine the financial position of the company investor generally study and analyse the…

Q: Describe the strenghts and weaknesses of companies dding debt in their capital structure.

A: Debt is a financial instrument which is used by the companies to fund their business. Companies…

Q: How does a company utilize stocks and bonds in financing growth? Identify the major sources of…

A: Financial capital is the money used to fund businesses and some public projects. It is made…

Q: Capital structure of a company is more appropriately calculated using the: book value of debt and…

A: Capital structure of a company consists of debt, equity or any other source of finance used to…

Q: Which of the following is a cost associated with an IPO? Interest expenses Out-of-pocket expenses…

A: Company means the form of business where management is separately from owner and have perpetual…

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: what do you think is the significance of Earnings Per Share (EPS) especially in measuring the…

A: Earnings per share or EPS is an important financial measure, which indicates the profitability of a…

Q: Compare the effect of distribution of dividends and retained earnings  on the value of the firm.

A: A dividend is a profit distribution made by a firm to its shareholders. When a company makes a…

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of a firm?

A: Theoretically, there exists a debt equity ratio at which the value of the firm gets maximized.…

Q: Why mix of equity and debt finance being preferred in financing businesses?

A: The financial structure composed of debt and equity capital is frequently preferred in the…

Q: An investor worried about a company’s long-term solvency would most likely examine its:C .…

A:

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: easier to calculate directly, the expected rate of return on the assets of a firm or the expected…

A: The return on assets states how profitable the assets of company are in generating the revenue. To…

Q: Discuss how financial leverage or trading on equity is advantageous to the firm.

A: Trading on equity/ financial leverage is the process to earn higher returns on the debt of the…

Q: Which company is more reliant on equity to fund their assets based on the ratios you have? What are…

A: The Decision regarding the Capital Structure of a Company is a very important aspect. A  company can…

Q: Which type of financial ratio tells you how well a company can cover its long-term liabilities?

A: Financial ratios: Financial ratios are performance measurement methods used by the company to…

Q: For purposes of measuring a firm’s leverage, should preferred stock be classified as debt orequity?…

A: We cannot categorize preferred stock as entirely debt or equity. It is a mixture and is alike bonds…

Q: Is there an easily identifiable debt-equity ratio that will maximize the value of the firm？support…

A: No, it is not easy to identify a debt-equity ratio, which would increase the firm’s value.

Q: Capital structure refers to how the firm finances its operations and growth through a combination of…

A: Security: It can be defined as a financial instrument that is used for raising or investing funds by…

Q: All business decisions involve aspects of risk and return. Rank order the following investment…

A: Risk and return are the two most important factors in considering any business decisions as it…

Q: what is the need to conduct the Solvency Analysis when the liquidity analysis serves the purpose of…

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

Q: Financial risk refers to the: Multiple Choice   possibility that interest rates will increase.…

A: Financial risk refers to the inability of the firms to meet its debt obligations. In the case of…

Q: Why would a company’s return on total assets be different from its return on common stockholders’…

A: Equity: Each company needs finance to run the business. Equity is one of the method through which…

Q: How do we use debt to equity ratio to evaluate business performance?

A: debt to equity ratio is a ratio used to measure the solvency of a business . Debt to equity ratio is…

Q: Describe the debt-to-equity ratio and explain how creditors and owners use this ratio to evaluate a…

A: Ratio analysis is a method of analyzing a company's liquidity, profitability, and operational…

Q: Briefly describe the ratios that can be used to evaluate a company’s stock as an investment.

A:

Q: What is the relationship of business risk, financial risk, and stand-alone risk? How to calculate…

A: Risk refers to the proportion of uncertainty arising as a potential financial loss inherent while…

Q: Discuss the benefits of managing financial risks in a company?

A: Risk is the factor which arises from the uncertain future factors. It is always preferable to manage…

Q: Explain how the use of more debt in the company affects return on equity (ROE).

A: ROE or Return on Equity relates to portion of equity capital invested by owner that are generally…