(3) Which size of firm, large or small, is moreprone to business failure? Why?

Q: How do transaction costs and asymmetric information hinder the growth of financial markets?

A: Transaction cost : transaction cost are expense incurred when buying or selling goods or services.…

Q: 3. Discuss whether over-diversification is a consequence of corporate governance failure.

A: Corporate governance refers to the set of rules, policies, and procedures to self-control the firm…

Q: Is it feasible for a new company endeavor to be lucrative while also experiencing financial…

A: Introduction: According to Entrepreneur, it takes a minimum of three years for a company to become…

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: How is it possible for a firm to grow itself out of business and how can this be guarded against as…

A: Finance managers are accounting experts concerned for a company or organization's financial…

Q: What are the options available to a company in the event of a financial failure?

A: Overspending and a more considerable degree of illiquid assets might lead to the firm's financial…

Q: Can a company be profitable but not liquid? Explain.

A: Liquidity: It can be defined as the ease or quickness with which the short term assets of a company…

Q: incentives of business profits create unwarranted influence in times of war

A: Business have the objective of making more profits but at the time of war like situations this…

Q: Is it possible for a new business venture to be profitable and yet have financial trouble?

A: Corporate finance is referred as the decision of the firm to take capital investments and other…

Q: What can be said about a firm whose owners’ equity is a negative amount? How could such a situation…

A:

Q: Why does business risk vary from industry to industry?

A: Business risk It is the probability of occurrence of an inadequate amount of loss because 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: How does operating leverage affect business risk?

A: If an organization has high fixed expenses or cost, and if an organization experiences issues…

Q: Which of the following objectives of the company creates immoral practices such as: corrupt…

A: In Welfare maximisation, company works for the wellbeing of society, people, environment etc. If an…

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: Why would managers misrepresent the financial results oftheir companies?

A: Fraud:   It is an intentional misappropriation of the assets or the financial records of an…

Q: Can a firm maximize its profit if it is only managed to meet shareholders' interests? (Own words…

A: The shareholders of the company measn the people that purchase the shares of the company. There are…

Q: Implications of the business risk approach?

A: Business risk is the exposure a company or organization has to factor(s) that will lower its profits…

Q: What is cost of financial distress to the firm without going bankrupt?Give two examples.

A: The financial distress costs are all such cost incurred by company due to the probability that it…

Q: What factors reduce the effectiveness of companies business plan

A: A business plan is a written document that explains all the things about business objectives and how…

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 are the disadvantages of the financial intermediaries and the negative ways they can impact the…

A: A financial intermediary is that entity that acts as a middleman in a financial transaction taking…

Q: why do firms use non financial measures

A:

Q: What are the main implications of financial risk associated with the company?

A: There are various types for financial risk which are associated with the company such as: 1) Market…

Q: How is liquidity both beneficial and harmful to a firm?

A: The ease with which a security or asset can be turned into available cash without impacting its…

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.