Increase the cost and amount of assets necessary to generate each dollar of sales because it will increase the company’s total assets turnover.   Decrease the amount of debt financing us

Q: If a firm’s ROE is low and management wants to improve it, explain how using more debtmight help.

A: ROE refers to return on equity.It is a measure of profitability of a firm with respect to its…

Q: Which of the following changes would tend to increase the cost of capital for a traditional firm? O…

A: a).  Increasing the amount of debt financing while reducing the amount of equity financing increases…

Q: 11.Explain why a firm needs to understand their allocation of debt financing to equity (the amount…

A: The major decision that a financial manager has to make while making the financing decision is to…

Q: A firm wants a sustainable growth rate of 2.73 percent while maintaining a dividend payout ratio of…

A: The debt-equity ratio is a measure of the creditors' and shareholders' or owners' respective…

Q: As a firm grows, it must support increases in revenue with new investments in assets. The…

A: Self-supporting growth rate: The self-supporting growth rate is the sustainable growth rate. It is…

Q: A firm with positive cash flow from financing Is using their excess cash to pay down their debt,…

A: Lets understand the basics. Cashflow statement is divided into three major parts. (1) Cashflow from…

Q: 4. If a higher ROE is desirable, why don't companies take on large amounts of debt? a. Additional…

A: The return on equity is used to evaluate the profit earned on an investment considering the profit…

Q: All else the same, which of the following management decisions would help alleviate the problem of a…

A: To alleviate the problem of excess cash, company’s management can take following steps- Investment…

Q: When the company is working at full capacity, the assets in the AFN equation is the total assets…

A: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only…

Q: 1) Describe the various sources of finance a company can use in meeting their long-term and…

A: There are two types of finance a company can get - Short term source of finance  Long term source of…

Q: Which one of the following is not an effect of an increase in leverage     Managers have fewer…

A: Increases in leverage means introducing more debt into capital structure.

Q: Assuming you have done the financial ratio analysis and you have realized that profitability is…

A: PLEASE LIKE THE ANSWER, YOUR RESPONSE MATTERS   After looking at the case study, there is a lot of…

Q: how would you comment on a company that has positive cash flows and plans an expansion project…

A: Positive cash flows means that the company is generating more cash than it is spending, which is a…

Q: How would answer this question? You are estimating your company's external financing needs for the…

A: SOLUTION- Reducing the collection period is the change that we need to make to company’s operating…

Q: In each of the theories of capital structure, the cost of equity increases as the amount of debt…

A: Capital Structure means a combination of different sources of finance used by a corporation to…

Q: Suppose a company ABC is forecasting an increase in sales. By using AFN model of forecasting which…

A: The objective of the question is to identify which of the given scenarios would decrease the…

Q: What is the effect of extending the collection period for accounts receivable? The collection cost…

A: By extending the collection period, Debtors will be encouraged to purchase more and may eventually…

Q: An analyst at a company notes that its cost of debt is far below that of equity. He concludes that…

A: The balance between equity and debt in a company's capital structure is a fundamental aspect of…

Q: Discuss the factors that affect the WACC. Also discuss how these factors may differ somewhat from…

A: WACC: Weighted average cost of capital refers to the rate of the cost that a company or business…

Q: If a firm wishes to retain the same return on equity when its net profit margin and total asset…

A: Net profit margin is given by profit divided by sales.So decline indicates that net income is…

Q: Please answer with reason for all why the option is correct and why the other options are incorrect…

A: Return on equity ( ROE) is profitability of a company in relation to it's total equity. It is…

Q: Company X has a profit margin of 0.08, asset turnover of 1.3, and equity multiplier of 4.0. Which of…

A: Return on Equity (ROE) may be a money related metric that assesses a company's productivity in…

Q: A firm wants a sustainable growth rate of 3.68 percent while maintaining a dividend payout ratio of…

A: The formula to calculate the sustainable growth rate is:368.The given value of dividend payout…

Q: f interest means higher levels of loans, and therefore, higher level of investment in real capital…

A: Introduction : In simple words, financial intermediaries refers to the individuals and the entities…

Q: Which of the following events is most likely to encourage a firm to INCREASE the amount of debt in…

A: Stability in the business will lead to increase in long term debt

Q: pany borrows, the higher will be its tax shields, therefore a company will always prefer to issue…

A: WACC is weighted average cost of capital after tax.

Q: Which of the following will increase the additional funds needed from external sources?

A: EXTERNAL SOURCES OF FUNDS

Q: State if each of the following would increase or decrease AFN.    A high growth rate.  A low…

A: Additional Funds Needed (AFN) is that the amount of cash raised by a corporation to expand its…

Q: Which of the following situation in which the quality of the company’s pay-out to shareholders may…

A: A dividend is an amount that is paid to the shareholders on their investment. It is declared out of…

Q: Consider the following two potential transactions: (i) borrow from a bank; and (ii) use the…

A: Financial leverage determines the proportion of debt capital in respect to the total capital…

Q: return on investment

A: First option is wrong because the return on investment will increase if the invested capital…

Q: Which of coming up next isn't a money outpouring?    a) Increase in Prepaid costs    b) Increase…

A: Money outpouring means a situation when money is outpoured or outflown from the business.

Q: As a firm grows, it must support increases in revenue with new investments in assets. The…

A: Formula for sustainable growth rate is Sustainable growth rate =ROA*Retention ratio1-(ROA*Retention…

Q: Calculating the margin of safety (MOS) measure will help a firm answer which of the following…

A: The objective of the question is to identify which of the given questions can be answered by…

Q: 9. A firm is considering actions which will raise its debt ratio. It is anticipated that these…

A: financial ratio analysis are considered to be an important or investor in order to make decisions…

Q: Companies Heidee and Leaudy have the same sales, tax rate, interest rate on their debt, total…

A: Equity multiplier is a measure of the company’s leverage. It is calculated as Total assets divided…

Q: Delgado is interviewing with the Bank of MF for a financial analyst position. The interviewer is…

A: Valuation is done based on the free cash available to the company and cost of capital and growth…

Q: gned to show that the speaker is confused. Buggins Inc. is financed equally by debt and equity, each…

A: A. The company will have a debt of $1,250,000, which means it will have a proportion of…

Q: financial strengths and weaknesses? What a

A: Financing refers to the procedure of raising funds or money from various sources such as banks,…

Q: According to theory, the value of a firm is maximized by: Issuing no debt Issuing the maximum amount…

A: The value of a corporation is the total market value of the corporation which reflects the claims by…

Q: Which of the following is not one of the things that manager can do to reduce the capital ratio…

A: Paying out higher dividends to stockholders.

Q: Identify and explain each of the if it encourage a firm to increase or decrease debt in its capital…

A: Answer a: If there is an increase in the corporate tax rate, it would encourage a firm to increase…

Q: Which of the following is true.     The firm’s ultimate financial goal is to maximize its revenues…

A: Financial goal: The main goal of the firm is to maximize the shareholder's wealth and maximize the…

Q: (a)What is the significance of the internal growth rate? The sustainablegrowthrate? (b)Assume that…

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