Why is limited liability more important for firms

Reference no: EM131020999

Why is limited liability more important for firms trying to raise funds from a large number of investors than for firms trying to raise funds from a small number of investors?

Reference no: EM131020999

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Cost of equity if the debt-to-equity ratio were zero : A firm has a debt-to-equity ratio of 1. Its cost of equity is 16 percent and its pretax cost of debt is 8 percent. If there are no taxes or other imperfections, what would be its cost of equity if the debt-to-equity ratio were zero?

What is days sales outstanding-average amount of receivables : Snider Industries sells on terms of 3/10, net 20. Total sales for the year are $1,724,500. Thirty percent of the customers pay on the 10th day and take discounts; the other 70% pay, on average, 68 days after their purchases. What is the days sales ou..

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The project requires an initial acquisition cost : A domestic firm is considering a 8-year project. The project requires an initial acquisition cost of $2 mil and needs additional installation cost of $0.2 mil at the beginning of the project. Determine whether you will accept or reject this project u..

Why is limited liability more important for firms : Why is limited liability more important for firms trying to raise funds from a large number of investors than for firms trying to raise funds from a small number of investors?

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What is the length of the firms cash conversion cycle : Negus Enterprises has an inventory conversion period of 73 days, an average collection period of 49 days, and a payables deferral period of 20 days. Assume that cost of goods sold is 80% of sales. What is the length of the firm's cash conversion cycl..

Does existence of private equity firms reduce any problem : A private equity firm can buy stock in these firms and have its employees elected to the firms' boards of directors and may even acquire control of the targeted firm and replace the top management. Does the existence of private equity firms reduce..

Reset mortgage allows for one interest rate reset : A reset mortgage allows for one interest rate reset during the life of the loan. The mortgage rate will be reset after 5 years, to fully amortize at the end of the original 30 year period (i.e. after 25 more years). For a 6 5/8%, $120,000, mortgage, ..

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