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.
Cheers!
Make sure the brand conveys what is <em>unique </em>about your company.
If you don't focus on the customer or make your product/brand unique you won't stand out in the marketplace and customers will not want to choose your product.
The answer is (A) It competes with private business and (C) It acts as an employer.
In a way, the United States government already has direct role in the economy right now, since it has businesses such as the US Postal Service – which competes with private businesses that provide logistics support for customers, such as FedEx. Since it has businesses, the government automatically also plays the role of an employer.
Answer: B2B
Explanation:
Based on the information given, we can infer that the interaction of the employee with ASI is an example of B2B..
Business-to-business simply means a form of transaction that is done between businesses, such as between a manufacturer and the wholesaler. It doesn't take place between the producer and the consumer.
Answer:
The yield today for 2-year Treasury securities is 4.27%
Explanation:
In order to calculate the yield today for 2-year Treasury securities we would have to calculate the following formula:
2-year treasury yield = [(1 + 1-yr treasury yield) * (1 + 1-yr treasury yield, 1 year from now)]1/2 - 1
= [(1 + 0.0415) * (1 + 0.044)]∧1/2 - 1
= [1.0873]∧0.5 - 1
= 1.0427 - 1 = 0.0427, or 4.27%
The yield today for 2-year Treasury securities is 4.27%
