Capital structure decisions should always aim at having debt component in order to

Related MCQs

• If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)?
• Consider the below mentioned statements: 1. A debt-equity ratio of 2:1 indicates that for every 1 unit of equity, the company can raise 2 units of debt. 2. The cost of floating a debt is greater than the cost of floating an equity issue. State True or False:
• A company can increase its value and reduce the overall cost of capital by increasing the proportion of debt in its capital structure according to ----- approach
• A company should arrange the capital structure in such a way that there is maximum flexibility in the capital and cost of capital is
• Debt to Total Assets of a firm is .2. The Debt to Equity boo would be:
• In case of Net Income Approach, when the debt proportion is increased, the cost of debt:
• Debt-to-total assets (D/TA) ratio is .4. What is its debt-to-equity (D/E) ratio?
• Lei-Feng, Inc.'s $100 par value preferred stock just paid its $10 per share annual dividend. The preferred stock has a current market price of $96 a share. The firm's marginal tax rate (combined federal and state) is 40 percent, and the firm plans to maintain its current capital structure relationship into the future. The component cost of preferred stock to Lei-Feng, Inc. would be closest to .
• Use of Preference Share Capital in Capital structure
• According to MM approach, two identical firms in all respects except their capital structure can not have different market values or cost of capital because of-----