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NEW QUESTION: 1
A. Option C
B. Option A
C. Option D
D. Option B
Answer: A
NEW QUESTION: 2
What is the only mandatory document purchasing services
Choose the correct answer
Choose one:
A. A/P invoice
B. Payment balanced
C. Purchase order
D. Vendor's details
Answer: A
NEW QUESTION: 3
Which of the following are predefined targets for netfilter rules? (Choose TWO correct answers.)
A. ACCEPT
B. JUMP
C. NAT
D. RETURN
E. REROUTE
Answer: A,D
NEW QUESTION: 4
When considering an appropriate mix of debt and equity, Chief Financial Officers generally consider:
I. Tax advantage of debt
II. Financial distress costs
III. Agency costs of equity
IV. Retaining financial flexibility
A. I, III and IV
B. I and II
C. I, II, III and IV
D. I, II and IV
Answer: D
Explanation:
Explanation
The tax advantage of debt is an important input into a decision on the financial structure of a firm. Increasing debt increases the fixed expenses of a business that must be paid out of current cash flows, thereby increasing the cost of financial distress. CFOs consider the volatility of their earnings, outlook for the future and the possibility of financial distress at varying levels of debt, so that certainly is an input into the debt-equity tradeoff. Holding higher levels of equity increases financial flexibility for financing new investments or acquisitions, and depending upon their plans for such activities, they may decide to hold a certain level of equity versus debt.
The agency costs of equity refer to the cost to shareholders arising from the management acting in its own interest rather than that of shareholders - and this is irrelevant to a decision on capital structure. Therefore Choice 'd' is the correct answer.