Explain the residual equity theory

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Reference no: EM131529480

Question: 1. Why is the residual equity theory more in line with recent research In finance than entity and proprietary theory?

2. Why do you think operating ratios (return-on-assets) are to (he combined effect of immateriality items than would be the case with solvency ratios (debt-to-equity and current rations)?

3. At the present time, the federal income tax code allows corporation deduct interest expense but Hot cash dividends paid. Docs the tax code tie in with any of the equity theories?

Reference no: EM131529480

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