Business Finance

All companies are subject to:

If a company is financed entirely by equity then variations in the return to shareholders are attributable only to:

Financial leverage is the relationship between:

MM Proposition I states that:

The chance that a borrower will fail to meet obligations to pay interest and principal as promised is known as:

MM Proposition II is based on the:

A company is said to be in a state of financial distress:

Which theory proposes that companies have an optimal capital structure based on a trade-off between the benefits and costs of using debt?

Which theory proposes that companies follow a hierarchy of financing sources?

A company with low financial leverage,large reserve borrowing capacity and few profitable investment opportunities is likely to:

Financial risk comes about when:

Financial leverage exposes shareholders to financial risk because:

Which of the following statements on financial leverage is true?

Calculate EPS if a company,with 1 million shares with a market price of $4 each and zero debt,decides to buy back 25 per cent of its outstanding shares by borrowing at 10% p.a.Assume current earnings are $0.4 million and taxes do not apply.

Which of the following is true of debt?

Which of the following statements is false?

When considering a firm's capital structure,a financial manager must:

Under the MM theorem,capital structure will not change the total value of a firm because:

A key assumption of the MM arbitrage argument is:

Arbitrage refers to: