Miller and modigliani Study guides, Class notes & Summaries

Modigliani and Miller (M&M) - correct answersThe case of perfect markets (mainly no taxes and no costs of financial distress A Firm cannot change the total value of its securities by splitting its cash flows into different streams. Therefore financing decisions do no matter in perfect market and MARKET VALUE OF THE FIRMS IS INDEPENDENT OF ITS CAPITAL STRUCTURE - correct answersTRUE When a company issues debt, what source of risk is created? - correct answersFinancial risk and that's bo...

TEST BANK For Intermediate Financial Management, 12th Edition By Eugene. Brigham, Phillip R. Daves. Chapter 1-32. Questions, Answers and Rationale. Part I: FUNDAMENTAL CONCEPTS OF CORPORATE FINANCE. 1. An Overview of Financial Management and the Financial Environment. Web Extension 1A: An Overview of Derivatives. Web Extension 1B: An Overview of Financial Institutions. 2. Risk and Return: Part I. Web Extension 2A: Continuous Probability Distributions. Web Extension 2B: Estimating Beta with a Fin...

An unlevered firm has a cost of capital of 14% and earnings before interest and taxes of $150,000. A levered firm with the same operations and assets has both a book value and a face value of debt of $700,000 with a 7% annual coupon. The applicable tax rate is 35%. What is the value of the levered firm? - ANSWER-$941,429 Financial leverage impacts the performance of the firm by: - ANSWER-increasing the volatility of the firm's net income. Gail's Dance Studio is currently an all equity fi...

The firm's capital structure refers to: - Answers-D. the mix of debt and equity used to finance the firm's assets The proposition that the cost of equity is a positive linear function of capital structure is called: - Answers-C. MM Proposition II The Modigliani-Miller Proposition without taxes states: - Answers-A. a firm cannot change the total value of its outstanding securities by changing its capital structure proportions MM Proposition I without taxes is used to illustrate" - Ans...

Which will be larger: accrual taxes payable or accounting income tax expense Accounting tax expense will be higher; actual taxes based on IRS rules will be lower Which financial ratios measure "efficiency"? Asset turnover and Fixed Asset turnover Which ratio is the best measure of a firm's ability to pay bills? Quick Ratio Which decision requires using subjective estimates? Economic life of a new asset What is the yield to maturity on a bond? The return earned...

Which will be larger: accrual taxes payable or accounting income tax expense - Correct answer-Accounting tax expense will be higher; actual taxes based on IRS rules will be lower Which financial ratios measure "efficiency"? - Correct answer-Asset turnover and Fixed Asset turnover Which ratio is the best measure of a firm's ability to pay bills? - Correct answer-Quick Ratio Which decision requires using subjective estimates? - Correct answer-Economic life of a new asset What is the yi...

A company made $10 million in revenue, recorded $2 million in net income, and paid $750,000 in dividends last year. What was the company's pay out ratio last year? Select one: a. 20.0% b. 2.7% c. 37.5% d. 7.5% Question 2 Correct Marked out of 1.00 Flag question Question text This study source was downloaded by from CourseH on 07-17-2022 14:01:19 GMT -05:00 . In which of the following situations would a shareholder prefer to receive stock dividends as opposed to cash dividends? ...

Capital Structure - correct answer -relative proportions of debt and equity Levered Equity - correct answer Equity in a firm with debt (with liabilities) Unlevered Equity - correct answer Equity in a firm with no debt (no liabilities) Modigliani Miller I - correct answer -In a perfect capital market, the total value of a firm's securities is equal to the market value of the total cash flows generated by its assets and it NOT affected by its choice of capital structu...

Deze samenvatting bevat alle hoofdstukken, voorbeelden en onderwerpen die je nodig hebt voor het tentamen van Corporate Finance aan UTwente: Hoofdstuk 15, 16, 17, 18, en 31

Fin 419 Final Exam / Fin419 Final Exam: LATEST-UNIVERSITY OF PHOENIXFIN 419 FINAL EXAM (30 QUESTIONS) From the financial statements, we can look at specific performance areas of a company by selecting key pieces of information and analyzing this information ________. • at a point in time • at a point in time or over a specific time horizon • All of these • over a specific time horizon When there are conflicts among managerial goals in U.S. markets, the most import...