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Ostrovityanka [42]
3 years ago
15

According to the signaling theory of capital structure, firms first use common equity for their capital, then use debt if and on

ly if they can raise no more equity on "reasonable" terms. This occurs because the use of debt financing signals to investors that the firm's managers think that the future does not look good.a. Trueb. False
Business
2 answers:
MArishka [77]3 years ago
5 0

Answer:

B) false

Explanation:

The signalling theory deals with differences in information between stockholders and management. If managers believe that the stock is undervalued, they will issue debt. On the other hand, if managers believe that the stock is overvalued, they will issue stock. An increase in debt is a sign that the company is doing very well and that management is confident about the company's outcome.

julia-pushkina [17]3 years ago
3 0

Answer:

False

Explanation:

This statement is false because firms are always known for the issuance of debts prior to new stock. This is because they find issuing debt is way cheaper. Because of the cheapness of issuing debt, this method is preferred to using common equity for their capital. The use of debt financing may not signal any message to managers that the future does not look good.

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E. You are the marketing manager for a U.S. manufacturer of disposable diapers. Your firm is considering entering the Brazilian
lesya692 [45]

Answer:

Advertising itself should be carried out toward the target market, that should always be the main plan.

The Brazilian markets differs in areas like culture, race, climate etc, as against that of The United States market, they also might have their preferences in a different way.for this, there should always be a different advertising system plan for Brazil

Explanation:

Solution

Advertising should always be done keeping in mind the target market.

The Brazilian market is different totally in terms of ethnicity, race,culture, likes, dislikes, preferences, climate, mindsets as compares to US market. they might not like what The United States market would like so there should be a difference in advertising plan for Brazil.

3 0
3 years ago
The current price of a 10-year Bond, $1000 par value bond is $1.158,91. Interest on this bond is paid every six months, and the
schepotkina [342]

Answer:

C) 14%

Explanation:

The nominal annual yield is exactly the same as the bond's annual coupon rate. The nominal annual yield is calculated as a fixed percentage of the bond's par value and it doesn't change if the market price of the bond increases or decreases.

The bond's current yield is the actual interest rate that the bond is paying since its calculation is based on the bond's market price, not its par value.

4 0
3 years ago
Give a real life example of mitigating a risk, avoiding a risk, transferring a risk and retaining a risk.
nikitadnepr [17]

Explanation:

Let us understand the terms with examples:

Avoiding a risk: A risk which is pre-identified and which would create huge loss for the ongoing task can be avoided.

For example:

If there is a deadline for a project and there are only few more days to complete, then planning a training program on soft skill will be a riskier one. So training program can be planned sometimes later, thus avoiding risk.

Transferring a risk: Normally this will be mentioned in the project contract. If there is an issue and the employees of the company are already filled with work, then the issue can be outsourced so now the risk is transferred.

Retaining a risk: You can retain the risk if the impact is negligible. Absence of a software developer for 10 days. So the Project manager need not worry about finding an alternate person for that 10 days alone, which might lead to less understanding of flow and may raise more errors if multiple resource work on the content.

Mitigating a risk: The risk will be avoided by taking some preventive measures. For example, if a smart board needs to be sold, a sales team cannot give a good demo hence the sale of product percentage is less. So to avoid this, a training can be arranged to sales team so that it will boost up sales. Others who were absent on training, ll sale less but the impact is minimum.

5 0
3 years ago
Definition of net worth ?
Luda [366]

Answer:

Net worth is the measure of the wealth of an entity, person, or corporation, as well as sectors and countries. Simply, net worth is defined as the difference between assets and liabilities. It is an important metric to gauge a company's health and it provides a snapshot of the firm's current financial position.

8 0
4 years ago
Read 2 more answers
A) Give an example of a deferred expense.
mamaluj [8]

Answer:

Payment of a Term Insurance Policy

Explanation:

A term insurance policy has a total price that is usually paid through the period determine for its coverage with monthly payments called premiums. In this case, the expense is deferred for an specific period of time. The logic behind this payments is that you received the service of product without paying the total price of it beforehand.

3 0
3 years ago
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