Cash flows to cover interest payments

Assignment Help Financial Management
Reference no: EM131066323

If a firm believes that it will have sufficient cash flows to cover interest payments, it may consider using ____ debt and ____ equity, which implies a ____ degree of financial leverage.

a. more; less; lower

b. more; less; higher

c. less; more; higher

d. none of the above

Reference no: EM131066323

Questions Cloud

Convert from preferred to common stock : Convertible preferred stock Valerian Corp. convertible preferred stock has a fixed conversion ratio of 4 common shares per 1 share of preferred stock. The preferred stock pays a dividend of $7.00 per share per year. What factors might cause an invest..
Develop a spreadsheet model that could be used to assist : Develop a spreadsheet model that could be used to assist Tim with retirement planning
How can some risk be relevant and some risk not relevant : Provide a definition of risk using your own words. How does this definition apply to finance? How can some risk be relevant and some risk not relevant? Why are there more than one measure for risk regarding stock?
How problematic have these issues made it for you at home : If you checked off any difficulties, how problematic have these issues made it for you at home, work, with other persons?
Cash flows to cover interest payments : If a firm believes that it will have sufficient cash flows to cover interest payments, it may consider using ____ debt and ____ equity, which implies a ____ degree of financial leverage.
Decide between two different conveyor belt systems : Lang Industrial Systems Company ( LISC) is trying to decide between two different conveyor belt systems. System A costs $ 240,000, has a four- year life, and requires $ 75,000 in pretax annual operating costs. Whichever project is chosen, it will not..
Draw an entity-relationship diagram for this database : Draw an Entity-Relationship diagram for this database using UML notation. Be sure to include all the entities mentioned above, together with attributes (including primary key attributes), relationships and multiplicity constraints
How much of new investment must be financed by common equity : On January 1, the total market value of the Tysseland Company was $60 million. During the year, the company plans to raise and invest $25 million in new projects. The firm's present market value capital structure, shown below, is considered to be opt..
Assesses employee strengths and weaknesses : What are some of the problems that can occur for management, as well as, employees, if you currently have an appraisal system, which assesses employee strengths and weaknesses once a year and employees do not have a way of improving their performa..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the yield to maturity for this bond

First, find the price of the following Bond X. The interest rate on the bond is 8%, paid semi-annually and the market yield is 9%. The maturity is 10 years. Second, assume Bond Y has the same price as calculated above. Based upon this bond price, and..

  Mortgage lenders base the mortgage interest rate

Mortgage lenders base the mortgage interest rate they offer you on your credit rating. This makes it financially critical to maintain a credit score of 700 or higher. How much more interest would you pay on a $207,000 home if you put 20% down and fin..

  Evaluating two competing investments

A company is evaluating two competing investments. Investment X has a cost of $100,000 and a NPV estimated at $35,000. Investment Y has a cost of $220,000 and a NPV estimated at $35,500. Taking everything into account, you would recommend the company..

  Prepare depreciation schedule for the assets

Prepare a depreciation schedule for the assets in the following transactions using the straight line method of depreciation: Analyze the results.

  Quantitative problem-investor plans to hold the stock

The weighted average cost of capital is 12%, and the FCFs are expected to continue growing at a 3% rate after Year 5. The firm has $26 million of market-value debt, but it has no preferred stock or any other outstanding claims. According to the valua..

  Use as the initial investment in fixed assets

Kenny, Inc., is looking at setting up a new manufacturing plant in South Park. The company bought some land six years ago for $8 million in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent facil..

  The effective annual interest rate for this account

At the end of each year, for 20 years, I deposit $1000 dollars into an account. The effective annual interest rate for this account (called account 1) is 5%. At the end of each year, i take the interest I am paid from this account and invest it into ..

  What is after-tax cash flow from the sale of the equipment

Quick Computing installed its previous generation of computer chip manufacturing equipment 3 years ago. Some of that older equipment will become unnecessary when the company goes into production of its new product. What is the after-tax cash flow fro..

  What is ex-dividend price of share in perfect capital market

Natsam Corporation has $250 million of excess cash. The firm has no debt and 500 million shares outstanding with a current market price of $15 per share. Natsam’s board has decided to pay out this cash as a one-time dividend. What is the ex-dividend ..

  Expected to pay the dividends

Lohn Corporation is expected to pay the following dividends over the next four years: $17, $13, $11, and $6.50. Afterward, the company pledges to maintain a constant 4 percent growth rate in dividends forever. If the required return on the stock is 1..

  Accounted for using the cost method

Which of the following stock investments should be accounted for using the cost method?

  Differentiate between outsourcing and off shoring

Differentiate between outsourcing and off shoring. Analyze the pros and cons of these practices.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd