What is the significance of the equity breakpoint? Question 9 options: Once a firm has spent an amount equal to the breakpoint, it must begin issuing new common stock if it wants to continue funding capital investment. Once a firm has spent an amount equal to the breakpoint, it is out of retained earnings and consequently will fund any remaining investment with debt only. Once a firm has spent an amount equal to the breakpoint, it will switch from common stock to preferred stock for its capital investment funding needs.
Risk and return
Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary.
Capital Asset Pricing Model
Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.
What is the significance of the equity breakpoint?
Question 9 options:
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Once a firm has spent an amount equal to the breakpoint, it must begin issuing new common stock if it wants to continue funding capital investment. |
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Once a firm has spent an amount equal to the breakpoint, it is out of |
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Once a firm has spent an amount equal to the breakpoint, it will switch from common stock to |
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