 Show Transcribed Image Text:SECTION A 1. Which of the following terms is defined as the mixture of a firm's debt and equity financing? A. Working capital management B. Cost of analysis C. Capital budgeting D. Capital structure 2. Which of the following is an agency cost? A. Accepting an investment opportunity that will add value to the firm B. increasing the quarterly dividend C. investing in a new project that creates firm value D. hiring outside accountants to audit the company's financial statement 3. The goal of a financial manager of a publicly traded corporation should be for: A. Maximize profit B. Maximize cash flow from operating activities C. Maximize the wealth of the shareholder D. Minimize the risk of investing in the firm. 4. A firm's investment decision is also called the: A. Financing decision. B. Capital budgeting decision. C. Capital structure decision. D. None of the above. 5. Conflicts of interest between shareholders and managers of firm result in: A. Principal-agent problem B. Increased agency cost C. Both A and B D. None of the above 6. In the principal-agent framework; Universiny of Professional Studue, Acera P. O. Box LG 149, Acc1 a Graduate Library Page 1 of 10 A. Shareholders are the principal B. Managers are the agents C. Shareholders are the agents D. A and B Q: How does the cost of equity based on internal funds differ from the cost of equity based on external… A: Note: Since you have asked multiple questions, we will solve the first question for you. If you want… Q: The relative proportion of debt, equity, and other securities that a firm has outstanding constitute… A: Capital structure refers to the amount of money invested in a busines. this amount of money can be… 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: how can a company can raise capital through the issuance of equities?Include the advantages and… A: Equity Capital is a means of financing with the help of ownership capital. Equity capital can be… Q: Which of the following represent sources of funds to a firm: A. Creditors B. Investors C. Profitable… A: Sources of fund refers to the source that provides the funds or supplies to the business to carry on… Q: 1. Using of available resources or funds within the firm, is known as a. Allocation c. issuance d.… A: Financial management refers to art and science of managing money. Dear student, as par Bartleby… 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: Compare between debt and equity financing perspectives for a firm. A: Firms often choose between the different sources of capital for financing needs to fund the… 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: Capital gearing ratio indicates the relationship between A. assets and capital B. loans and… A: Capital gearing ratio: Capital gearing ratio refers to the tool to analyze the capital structure of… Q: a. Explain the description and show examples of the following terms completely and clearly: implicit… A: The financial system of a nation includes different components such as financial institutions,… Q: 7.) Describe the debt and equity markets? How do organizations obtain financing from each market?… A: Debt is considered riskless, however equity securities have some inherent risk. Q: What capital components are typically included when estimating a firm’s corporate cost of capital?… A: Before we address the question, let's understand a bit about the capital itself.Capital:Capital is a… Q: or the ratio return on capital employed which of the following best describes capital employed : a-… A: Ratio Analysis: This refers to the performance measurement of the business, in order to know the… Q: In deciding the appropriate level of current assets for the firm, management is confronted with… A: Current Assets: They are the assets that can be converted into cash easily and short term in nature.… Q: Which of the following is a working capital management issue? O A. The choice of which long-term… A: Working capital is the amount of capital used to run daily operations of the business but the… Q: Is this a right formula? Market Value of Equity = Market capitalization - cash and investment +… A: Market value of equity and market capitalization are both same and is calculated as number of shares… Q: How do a company’s investment opportunities, capital structure,and working capital policies affect… A: Shareholders are the subscribers of the firm’s capital. They are the owners of the company. A… Q: answer the questions A: Working capital management is a strategy in which the business manages its current assets and… Q: Under this concept, the entity would first use a fixed ratio of retained earnings and long-term debt… A: Company have many method and Theory to arrange its finance. Following is the correct answer. 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: mpany's working capital come from which of the following financial statements? Select one: A: The right answer is option b. Balance sheet Q: Determining the source of finance comes under ____________________function. a. Investment Decision… A: Liquidity management helps in estimating the revenue and costs in operating activities. Thus… Q: a. What is a firm's cost of capital? b. Why is the company's cost of capital important in financial… A: The Answer: Q: As part of his duties, if a finance manager of a company is working on the appropriate source of… A: An organization can involve following decisions. Investment decisions: it deals with the application… Q: Which is NOT the primary concem of the financial manager? A Raising funds for the firm to finance… A: Work of Financial Manager: Financial managers are in charge of the financial well-being of a… Q: Describe how the following factors affect external capitalrequirements: (1) payout ratio, (2)… A: The funds which are raised externally i.e from outside sources is called external financing. The… Q: atios are used to analyze activities in the following areas: a. asset management; liquidity;… A: The question is based on the concept of Ratio Analysis. Q: Discuss the concept of an optimal capital structure? 2- Distinguish between business and financial… A: optimal capital structure is mix of equity and debt and also weighted average cost of capital. Q: Discuss how capital structure decisions can send useful signals to financial markets and… A: Capital structure is the combination of debt and equity, which use to raise capital for any company.… Q: Why is a financial structure of a capitalization structure (a mix of equity and debt finance) being… A: Answer: The financial structure of both debt and equity capital is often favored in the company… Q: Evaluate the financial analysis of the company's working capital and long term debt. A: Analysis of the financial statements is usually done to answer the questions of an analyst or… Q: A firm's capital structure can be determined by examining which parts of the firm's balance sheet?… A: A firm capital structure is generally consist of long term debt ,preferred stock and equity . A firm… Q: What is meant by Capital Structure of a company? In this context, describe the various sources of… A: The capital structure of a company describes the amount of debt and/or equity used to finance both… Q: A firm's overall cost of financing is equal to: I. Its weighted-average cost of capital II. The… A: Cost of financing represents the cost that is incurred in borrowing funds in order to purchase the… Knowledge Booster Learn more about Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below. 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When a firm uses a mixture of debt and financing?The answer is capital structure. The mix of debt and equity would represent how the business acquires and uses funds to finance its assets, referring to the capital structure.
What does Firms with a combination of equity and debt calculate?A firm's total cost of capital is a weighted average of the cost of equity and the cost of debt, known as the weighted average cost of capital (WACC).
Is the mixture of debt and equity maintained by a firm?Capital structure is the mixture of debt and equity maintained by a firm. The financial manager must decide on the best combination of debt and equity. In addition he/she must determine the least expensive sources of funds.
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Which one of the following terms is defined as the mixture of a firms debt and equity financing?
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