Why is debt finance usually cheaper than equity finance in the same business?
Question:
Why is debt finance usually cheaper than equity finance in the same business?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (QA)
There are two main reasons Borrowings are the subject of a clear contractual relationshi...View the full answer
Answered By
Ali Khawaja
my expertise are as follows: financial accounting : - journal entries - financial statements including balance sheet, profit & loss account, cash flow statement & statement of changes in equity -consolidated statement of financial position. -ratio analysis -depreciation methods -accounting concepts -understanding and application of all international financial reporting standards (ifrs) -international accounting standards (ias) -etc business analysis : -business strategy -strategic choices -business processes -e-business -e-marketing -project management -finance -hrm financial management : -project appraisal -capital budgeting -net present value (npv) -internal rate of return (irr) -net present value(npv) -payback period -strategic position -strategic choices -information technology -project management -finance -human resource management auditing: -internal audit -external audit -substantive procedures -analytic procedures -designing and assessment of internal controls -developing the flow charts & data flow diagrams -audit reports -engagement letter -materiality economics: -micro -macro -game theory -econometric -mathematical application in economics -empirical macroeconomics -international trade -international political economy -monetary theory and policy -public economics ,business law, and all regarding commerce
4.00+
1+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
List three specific parts of the Case Guide, Objectives and Strategy Section (See below) that you had the most difficulty understanding. Describe your current understanding of these parts. Provide...
-
Required Question # 1 (40 marks, How has Pepsi Corporation performed over the 10-year time period from 1981 to 1990? In your critical discussion focus on qualitative and quantitative indicators....
-
What type of business is S. G. Cowen? How is this firm different from the other financial firms? How systems and operations of financial firms are different from other types of businesses - say...
-
1. Was the contract between Joel King and Barber bilateral or unilateral? 2. What was bargained for and given in exchange by each party? Mark P. Painter, Judge This case involves neighbors and the...
-
The U.S. Central Intelligence Agency's World Face book (https://www.cia.gov/library/publications/the-world-factbook/) offers many comparative tables of world data. Go to this site and find the...
-
Vaughn Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of $115,000. a. b. Prepare the journal entry for the issuance when the...
-
A simple flow system to be used for steady-flow tests consists of a constant head tank connected to a length of 4-mm-diameter tubing as shown in Fig. P6.89. The liquid has a viscosity of \(0.015...
-
Bullen & Company makes and sells glare filters for microcomputer monitors. John Crane, controller, is responsible for preparing Bullens master budget and has assembled the data below for next year....
-
c) Please analyse figure below: i. ii. page: ABBACDEFGCDF Frame: 1 A A FL 2 BB 131 E 3 C G 4 D C Figure 2 D F What is the replacement policy that been used in Figure 2. Please support your answer...
-
Unicom is a regulated utility serving Northern Illinois. The following table lists the stock prices and dividends on Unicom from 1989 to 1998. a. Estimate the average annual return you would have...
-
Shiraz plc is financed by 10 million shares, whose current market value is 2.40 a share, and 10 per cent loan notes, with a nominal and market value of 14 million. The return on the ordinary shares...
-
When deducing the cost of equity through a dividend model, must we assume either a constant level of future dividends or a constant level of growth of dividends? Explain your response.
-
At a given point in a supersonic wind tunnel, the pressure and temperature are \(5 \times 10^{4} \mathrm{~N} / \mathrm{m}^{2}\) and \(200 \mathrm{~K}\), respectively. The total pressure at this point...
-
Comprehensive Problem (Tax Return} Problem). Mr. and Mrs. Sam Morris retired on February 10,2018, and call you in for tax advice. Both Sam and his wife Sarah have worked for many years. Sam is 65...
-
Describe the nature of survivors reactions to downsizing and the existence of moderating variables affecting these, and evaluate their significance for organisations using this type of change...
-
Outline a range of strategies and data collection techniques involving both primary and secondary data, which may be used to evaluate strategic human resource management;
-
Charles Adams, who is single, retired on March 3, 2018, at the age of 65. For the year 2018, he receives the following income: What is Charles' modified AGI? What amount, if any, of his Social...
-
Identify the major principles which underpin the concept of strategic human resource management (SHRM);
-
Hanno Legal Services provides legal advice to clients. The following data apply to the first six months of operation: .:. Required a. What is the average service revenue per hour for the six-month...
-
For liquid water the isothermal compressibility is given by; where r and b are functions of temperature only. If 1 kg of water is compressed isothermally and reversibly from I to 500 bar at 60(C. how...
-
Assume that the chairman of the board of directors of a large public listed company has asked you to develop a set of criteria against which the performance of a non-executive director could be...
-
Identify the main ways in which a large listed company may communicate with its shareholders.
-
Alkrom plc, an oil trader, commenced trading on 1 January and had the following opening statement of financial position. Statement of financial position as at 1 January m ASSETS Cash 20.0 EQUITY...
-
Consulting the diagram below, we can write the x- and y-direction velocities at labeled points A, B, and C as: y C A B X V = u, v VB = u + Vc=u, v + (x and y-components of the velocity at point A...
-
Let f(u,) be the probability density function of a normally distributed random variable in R. Write code to plot the isocontours of the following functions, each on its own separate figure. You are...
-
Find the appropriate weights to classify two-dimensional input patterns using the Hebb rule. The target for the first pattern is (1), and the target for the second pattern is (-1). # . . # #. % . # #...
Study smarter with the SolutionInn App