Explain four comparative advantages of debt as a source of finance over equity

Q: Describe the Ratios that show how a firm uses debt financing?

A: Debt to Asset ratio It is a ratio that helps in measuring the company’s assets financed through the…

Q: The return which the debt holders get is called Select one: a. Profit b. Dividend c. Earnings d.…

A: Answer : (d) Interest. Debts are the credits for the company and hence, provides return in the form…

Q: What are the relative advantages of equity versus debt financing?

A: Equity financing is selling a stake in your firm in return for a monetary investment. In contrast to…

Q: list and explain the most common sources of debt financing

A: When a business needs funds for working capital or for capital expenditures then, the business…

Q: Outline the main conclusions regarding the choice between debt and equity of both M&M( tax) and…

A: Capital structure means the mix of debt and equity for financing long term operations. It consist…

Q: Compare the advantages and disadvantages of debt andequity financing, and explain the two major…

A: Debt Financing: Debt financing refers to borrowing money from outside to meet the capital…

Q: Outline three methods for estimating company’s cost of debt (not including the Expected Yield) and…

A: Debt is a prominent component of capital , cost of debt is always

Q: State the advantages of long-term debt financing.

A: Long Term Debt Financing: It refers to the debt financing required by the firm which usually has a…

Q: in a page long or 2 define debt and equity financing and the advantages and disadvantages of both.…

A: Applying for a loan from a lender is what debt entails. It can be temporary, long-term, or…

Q: What are the two best arguments against debt reduction (i.e., the cons)?

A: The term "debt reduction" is also known as debt settlement. As the name suggests, it…

Q: What are the primary differences between debt financing and equity financing?

A: Financing refers to providing the funds to the business for business activities, individuals and…

Q: What are the four categories of collateral value for secured loans?How does each affect credit risk?

A: Real property (e.g., land, buildings) Tangible personal property (e.g., equipment, vehicles)…

Q: what are the sources of debt financing?

A: debt financing: it the amount of money borrowed by he firm to run the business.

Q: Discuss 3 advantages with examples of collateralized debt obligation. Please explain in details

A: A collateralized debt obligation also known as a CDO is a complex structured credit product which is…

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: Please explain one advantage and one disadvantage of financing a company with debt.   Advantage…

A: Advantage: Tax BenefitsOne significant advantage of financing a company with debt is the potential…

Q: What is credit enhancement, and what effect does it have on debt costs?

A: Credit enhancement represents the strategy that improves the business' credit risk profile. It helps…

Q: is it incorrect to use coupon rate of debt towards cost of debt? Briefly explain.

A: The organization needs money to run the business and achieve its goal. The company raises money by…

Q: Explain FOUR (4) reasons that influence the changes which make debt security yields vary. Please…

A: Debt Security -An investment that assigns a claim on an organization's financial commitments to…

Q: at is the relationship of Debt (Loans) to Borrowers to Financial Intermediaries?

A: The financial intermediaries are very important in the financial world and transactions and there…

Q: What are factors that affect the expected rate of return for holders of debt and equity?

A: The expected return is the return which the investors expect to receive in return from their…

Q: Your firm has estimated the following cash flows for tw mutually exclusive capital investment…

A: Discounting payback period is calculated by discounting the cash flows of the projects. Discounting…

Q: Give some examples of debt financing and equity financing？ What are the different types of Debt…

A: STEP 1 Debt Financing Debt financing refers to the sale of debt securities to retail investors by a…

Q: difference between debt and quity

A: A company’s capital consists of two forms, one is equity and the other is debt. When a company is…

Q: Why do we use an after-tax figure for cost of debt but not for cost of equity?

A: Cost of debt is the interest payments a company needs to make for debt financing, whereas cost of…

Q: Describe the most common sources of debt financing? Briefly Explain

A: Debt financing refers to the practice of borrowing money from lenders, such as banks or other…

Q: re direct and indirect forms of financing.

A: Direct financing is no intermediaries involved and indirect financing is not direct but through…

Q: When is debt financing more attractive than equity financing?

A: Debt refers to the amount borrowed by one party from another party, This arrangement of borrowing…

Q: Explain or illustrate before-tax cost of debt and after-tax cost of debt. 5. What are the…

A: The equity source and debt source of financing is considered to be important in capital structure.…

Q: List and explain the three (3) primary advantages of debt financing as provided our authors.

A: Debt financing is the process wherein the business entities sells their debt instruments to the…

Q: What are the advantages and disadvantages of debt financing? Of equity finacing?

A: Financing is a process of providing funds for business activities, making purchases, and investing.…

Q: state advantages and disadvantages of debt and common equity

A: Financing activities include raising funds from various sources for business operation and managing…

Q: Explain the Leverage and the Incremental Cost of Debt with example?

A: Leverage – Leverage is a financial term it means using the debt for their financial needs and…