What elements must be included in a lease in order for it to be considered a financial (capital) lease?
Answer to relevant QuestionsComment on the following statement: A key benefit of leasing is that it allows for the effective depreciation of land. For each of the loan amounts, interest rates, loan terms, and annual payments shown in the following table, calculate the annual interest paid each year over the term of the loan, assuming that the payments are made at the ...Why is it difficult for a firm with weaker cash flows to mimic a dividend increase undertaken by a firm with stronger cash flows? What is the basis of the argument that transactions costs provide a reason for firms to pay dividends, and how has the steep decline in transactions costs in recent years affected this argument? Explain the difference between a firm’s sustainable growth rate and its optimal growth rate. In what circumstances is a firm’s optimal growth rate likely to exceed its sustainable rate, and under what conditions would ...
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