Answer: WACC remains constant as leverage increases.
Explanation:
Here is the complete question:
In the Modigliani Miller perfect world with no taxes, if we assume that the effect of adding debt to firm's capital structure is exactly balanced by an increase in the cost of equity as more debt is added, what is the effect of increased debt usage on the weighted average cost of capital (WACC)?
a. WACC first increases, then decreases as leverage increases.
b. WACC remains constant as leverage increases.
c. WACC increases continuously as leverage increases.
d. WACC decreases continually as leverage increases.
In the Modigliani Miller perfect world with no taxes, the capital structure is not relevant as the way a company finances it operations does not really matter.
For the capital markets, they will be perfectly competitive and there will be no taxes, bankruptcy costs or transactions cost and investors all have the same expectations. The weighted average cost if capital will be thesame even though leverage increases.
Answer:
A) Provide management with cost information.
Explanation:
Cost accounting is a part of accounting that deals mainly with cost. Cost accounting is that part of management accounting which establishes budgets and standard costs and actual costs of operations, processes, departments or products and the analysis of variance, profitability or social use of funds. Cost accounting provides information on cost to the management for proper decision making. Decision making is concerned with making choices among alternatives. All alternatives have their cost implications. Cost accounting analyses these alternatives and suggest to the management which alternative will be more cost effective cor it compares the cost and benefit which alternative will be more profitable.
The answer to the question is oligopoly.
Oligopoly is a type of market where there are only a few number of companies that dominate as the primary sellers to a large number of customers. It is almost similar in concept to monopoly, but the latter only has one seller dominating the market. Other oligopoly examples beside the music industry would be internet companies.
Answer:
A. To create a competitive advantage.
Explanation:
One of the most efficient and effective ways for a company to create a competitive advantage is through the use of technology cycles and innovation streams.
This methods most likely lead to the development of either new products or services, or the improvement of existing products or services, leading to a competitive advtange over competitors, either in terms of price, quality, or both.
Answer: Option E
Explanation: In simple words, a business model refers to a framework that is used by the organisation to monitor and analyze the activities that are done in the workplace for smooth running of operations.
This model works a guideline and also facilitates the objectives of comparison for an organisation.
Thus, the correct option is E .
