Answer:
The Correct Answer is C.
the trade-off theory posits that a firm would reach it's optimal capital structure if the tax savings from additional borrowing results in lower financial distress costs.
Explanation:
The combination of debt and equity used by a company to finance its operations and growth is referred to as it's <em>capital structure</em>. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings.
A company capital structure is affected by cost of capital. The higher the cost of borrowing the less the present value of the firm’s future cash flows, discounted by the Weighted Average Cost of Capital (WACC) and vice versa.
The weighted average cost of capital (WACC) is arrived at by calculating a firm's cost of capital in which each category of capital and proportionately weighing them. Categories of capital include including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.
Thus, the primary objective of the office of the finance manager should be to find the optimal capital structure that will result in the lowest WACC and the maximum value of the company (shareholder wealth).
Why?
The <em><u>optimal capital structure</u></em> is estimated by calculating the mix of debt and equity that minimizes the weighted average cost of capital (WACC) of a company while maximizing its market value.
Thus when additional borrowing results in lower financial distress costs, the firm achieves the potential to reach it's Optimal Capital Structure.
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Answer:
The correct option is;
Prisoners traded for what they wanted
Explanation:
In the war camps, being that there where no privileged persons, everyone had to trade what they where given as rations for what they needed and as such trading became predominant in the camp as those who could afford to manage without taking some of the package contents from the Red Cross such as beef, coffee, biscuits and cheese can trade for other items with some making small fortunes in cigarettes (which became more or less the currency) and biscuits.
Answer:
A group of people who make decisions that determine the future of a company.
Explanation:
Board of Directors are basically the ones calling all the shots in a company. They decide all the major decisions relating to their business and it could affect every employee and employer of the company. They can decide anything from who gets fired and who stays on their team to new ways to produce the product that they sell.
Hope this helps.
The final payment is <u><em>not </em></u>a fee that contributes to the original cost of leasing an automobile, option B is the correct answer.
<h3 /><h3>How is leasing charged?</h3>
The first payment is, predictably, the same as one month's rent.
A lender or lessor will impose an acquisition fee to offset the costs of establishing a loan or lease agreement.
A disposition fee, sometimes known as a turn-in fee, is a cost associated with returning a rented vehicle.
Therefore, final payment doesn't contribute to leasing a car.
For more information about leasing, refer below
brainly.com/question/1059164
Answer:
$2,650,000
Explanation:
For Instrument Division:
Increase in Income per unit:
= Existing Purchase Price - New Purchase Cost (Transfer price)
= $175 - $148
= $27
Total Savings/Increase in Income:
= Number of units × Increase in Income per unit
= 50,000 × $27
= $1,350,000
For Components Division:
Increase in Income per unit:
= Sales or transfer price - Variable Cost
= $148 - $122
= $26
Total Savings/Increase in Income:
= Number of units × Increase in Income per unit
= 50,000 × $26
= $1,300,000
Therefore, the total income from operations increase is as follows:
= Instrument division increase in income + Component division increase in income
= $1,350,000 + $1,300,000
= $2,650,000
