This is false that The optimal capital structure is the one where the percentages of debt, preferred stock, and common equity minimize the firm's value.
The best combination of debt and equity financing that increases market value while lowering a company's cost of capital is known as an optimal capital structure. One strategy for aiming for the lowest cost mix of financing is to minimize the weighted average cost of capital (WACC).
Financial management greatly benefits from having the ideal capital structure. It enables a business to efficiently raise the required capital from a variety of sources. The ratio of debt to equity in the ideal capital structure will maximize the firm's wealth. The market price per share is at its highest and the cost of capital is at its lowest with this capital structure.
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Answer:
$76,000
Explanation:
The calculation of the interest expense is shown below:
= Reported amount of cash paid for interest + Decrease in prepaid interest - decrease in accrued interest payable
= $70,000 + $23,000 - $17,000
= $76,000
The decrease in prepaid interest is classified as a current asset and the accrued interest payable is current liabilities and we know that the rise in current assets and a decline in current liabilities are excluded, while the decline in current assets and an increase in current liabilities are included.
Answer:
Deflation
Explanation:
According to my research on different studies conducted by economists, I can say that based on the information provided within the question this is better known as Deflation. This term refers to a decrease in general price level of goods and services because of a certain financial crash. Which in this scenario it was caused by the Cashland's banking system crashing.
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Answer: over-borrowing.
Explanation:
credit cards function like this: you can "buy" a lot of things with it, including very very expensive things. this is because instead of really buying that product, you borrow money from the bank to buy it. you then have to pay it off in slower amounts of money over time until youve paid off the original cost of the product and more because the bank will most likely charge interest.
sounds great, right?
it is, until you cant afford to pay those smaller amounts of money. then, it starts to build up and if you still cant afford to pay the bank, they will begin to liquidize your physical assets (they take your stuff as payment, really anything, even your house can be taken.)
