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Verdich [7]
3 years ago
15

Which of the following expresses the value of a levered firm (VL) in the Static Tradeoff model of optimal capital structure [Not

e: VU denotes the value of the unlevered firm; CFD denotes expected costs of financial distress; and PV denotes present value.]
A. VL = PV(Tax Shield) - PV(CFD)

B. VL = VU + PV(Tax Shield) / PV(CFD)

C. VL = VU + PV(Tax Shield) - PV(CFD)

D. VL = VU + PV(Tax Shield)
Business
1 answer:
Brut [27]3 years ago
7 0

Answer:

C. VL = VU + PV(Tax Shield) - PV(CFD)

Explanation:

The static trade off theory is a theory of capital structure in corporate finance, first proposed by Alan Kraus and Robert H. Litzenberger. The theory emphasizes the trade-offs between the tax benefits of increasing leverage and the cost of bankruptcy associated with higher leverage. The <u>answer is C</u> as we know relative to the unleveraged firm, leverage provides both costs and benefits. The benefits are the tax shields provided by debt.

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Answer:

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2 years ago
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The approved detail design resulting from the __________ serves as a basis for making the decision to begin production. Systems
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Answer: Critical Design Review

Explanation:

A Critical Design Review is referred to as a review that's fine in order o ensure that a system can be able to move into fabrication, and test and also ensure that the stated performance requirements are met.

The approved detail design resulting from the critical design review serves as a basis for making the decision to begin production.

3 0
2 years ago
At December 31, Gill Co. reported accounts receivable of $238,000 and an allowance for uncollectible accounts of $600 (credit) b
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Answer:

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Explanation:

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accounts receivable of $238,000

allowance for uncollectable accounts of $600 (credit)

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