In the lease versus buy decision leasing often preferable

Assignment Help Financial Management

Reference no: EM13885185

a. if the firm is unable to borrow funds at a low rate

b. if the firm needs a specific pieces of equipment that only has value to that firm

c. because lease obligations do not affects the riskiness of the firm

d. if the lease has a higher tax rate than the lessor

Reference no: EM13885185

Questions Cloud

What is the required return on the companys stock : Keenan Co. is expected to maintain a constant 6.2 percent growth rate in its dividends indefinitely. If the company has a dividend yield of 8.0 percent, what is the required return on the company’s stock?

Which model is more cost effective : Equivalent Annual Annuity. Econo-Cool Air conditioners cost $300 to purchase, result in electricity bills of $150 per year, and last for 5 years. Luxury Air models cost $500, result in electricity bills of $100 per year and last for 8 years. The disc..

Lease requires payment at end of each year for eight years : A lease requires a payment at the end of each year for eight years. The initial asset value is $300,000, and the lessor expects the residual value to be $50,000 at the end of the lease. If the lessor requires a return of 9 percent, how much is the an..

Owners of preferred stock have a greater voting right : Owners of preferred stock have a greater voting right than common shareholders. From an individual investor's perspective, preferred stock is safer than bonds. Companies are more likely to issue preferred stock if they have a high tax bracket since p..

In the lease versus buy decision leasing often preferable : In the lease versus buy decision leasing often preferable

Compute the fair value of a chooser option which expires : Compute the fair value of a chooser option which expires after n=10 periods. At expiration the owner of the chooser gets to choose (at no cost) a European call option or a European put option. The call and put each have strike K=100 and they mature 5..

By what percent did the nominal value of the peso change : All interest rates are given as p.a. You must adjust to the period. Take money and interest rates to four decimals before rounding. By what percent did the nominal value of the U.S dollar change during 1995? By what percent did the nominal value of t..

Compute the fair value of an american call option : Compute the fair value of an American call option with strike K=110 and maturity n=10 periods where the option is written on a futures contract that expires after 15 periods. The futures contract is on the same underlying security of the previous que..

What is the present value of this annuity : If you start making $85 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 12.25 percent APR? What is the present value of this annuity?

User Account

All Pages