Mindtap Introduction To Business Printed Access Card For Pride/hughes/kapoor's Foundations Of Business
4th Edition
ISBN: 9781285773520
Author: Pride/Hughes/Kapoor
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 16, Problem 5DQ
Summary Introduction
To Discuss: The ways corporate manager or a small business owner utilise financial leverage for the improvement of the firm’s profits and return on owners’ equity.
Introduction: Financial leverage, likewise called trading on equity, is the budgetary trade-off between the return on the issuance of
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
How can a small business owner or corporate manager use financial leverage to improve the firms profits in return on owners equity
If a business firm has assets worth $170,000 and liabilities that total $40,000, what is the value of the owners’ equity?
What is the cheapest source of funds? When all other sources turn down your request for funding, what source is most likely to say yes? Why is this the case? Is the entrepreneur exploiting a personal relationship with this potential source of capital? What are the consequences of using this source of capital if the business goes bankrupt?
Chapter 16 Solutions
Mindtap Introduction To Business Printed Access Card For Pride/hughes/kapoor's Foundations Of Business
Ch. 16 - Prob. 1CCCh. 16 - Prob. 2CCCh. 16 - Prob. 3CCCh. 16 - Prob. 4CCCh. 16 - Prob. 5CCCh. 16 - Prob. 6CCCh. 16 - Prob. 7CCCh. 16 - Prob. 8CCCh. 16 - Prob. 9CCCh. 16 - Prob. 10CC
Ch. 16 - Prob. 11CCCh. 16 - Prob. 12CCCh. 16 - Prob. 13CCCh. 16 - Prob. 14CCCh. 16 - Prob. 15CCCh. 16 - Prob. 16CCCh. 16 - Prob. 17CCCh. 16 - Prob. 18CCCh. 16 - Prob. 19CCCh. 16 - Prob. 20CCCh. 16 - Prob. 21CCCh. 16 - Prob. 22CCCh. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - Prob. 6DQ
Knowledge Booster
Similar questions
- What are the ethical considerations involved in a company's decision to loan executives’ money to cover margin calls on their purchase of shares of company stock?arrow_forwardExplain the role of finance and the different types of jobs in finance. Identify the advantages and disadvantages of different forms of business organization.arrow_forwardIdentify and evaluate opportunities for applying financial tecnologies to create new business ventures.arrow_forward
- fixed obligations, whether they are operating costs or capital costs, when incurred allow a company to leverage small changes in one area to greater profitability: in a discussion Compare the concepts of operating leverage and financial leverage and discuss how does a company create the conditions necessary to have a greater multiplier effect on its earnings.arrow_forwardWhat are some common legal issues that businesses face, such as contract disputes, product liability claims, and employment lawsuits? How can you minimize your risk of being sued and protect your assets in these situations?arrow_forwardNow that we've looked at the operations of the stock market, let's review how well we can predict the future. If you had an aunt who offered to buy you 50 shares of any stock you desired, which company would you choose, and why would you select them? Part of your post should address 1. the current price and 2. if you intend to hold on to the stock for a long time or see it as a short term investment. While I won't be in touch to remind you, write down the particulars of stock somewhere and check it out around the same time next year... see how you did "in the market"!arrow_forward
- Describe three elements that can cause uncertainty within an enterprise's cash budget and provide your rationale for including each element. If you were the CFO of a company, what techniques would you use to cope with this uncertainty? How might your coping strategies differ when managing a large company (1,000+ employees) versus a significantly smaller company (100+ employees)?arrow_forwardPlease give me the solution of the following question: Define a Company. Explain its features and also explain advantages and disadvantages of forming a public company. Discuss the crucial importance of cash to a business. Is the profit that a business makes a reliable indicator of its cash balances? What is the reason for the existence of Corporate Governance? Discuss some principles of good governance as described by the Corporate Governance Code. Define Gearing and explain its advantages and disadvantages. Why might a bank be interested in a company’s level of gearing?arrow_forwardIf an individual needs funds to finance a small business and does not want to finance the business using loans, what other sources of funding might be available? Briefly describe each potential source of funding and indicate what kind of business enterprise would be the ideal candidate for each source of funding.arrow_forward
- discuss the advantages and disadvantages of debt financing and common stock financing. Then, for your initial post, discuss the following: From the company’s viewpoint, why would it prefer to fund the venture initially with common stock instead of debt?arrow_forwardWhat factors should businesses consider when determining financing needs to determine whether they can repay the debt? a. Inventory b. Depreciation c. Liquidity d. Equityarrow_forward1. How does interest rate affect the transfer of funds from the lender to the borrower?2. How do taxes affect a business firm?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Foundations of Business (MindTap Course List)MarketingISBN:9781337386920Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...MarketingISBN:9781285193946Author:William M. Pride, Robert J. Hughes, Jack R. KapoorPublisher:Cengage Learning
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning