My writer delivered an awesome dissertation on the Creek War, I definitely didn’t have the time to do all the research she did on my own.
Essay (any type)
09/08/2022
Provide the appropriate answers to the following: (i) According to NI approach capital structure…
Provide the appropriate answers to the following: (i) According to NI approach capital structure decision is to the valuation of the firm. (relevant/irrelevant) (ii) Market price per share if more debt is used in NI approach. (increases/ decreases/remains unchanged) (iii) According to NOI approach, cost of equity is . (iv) implies buying securities in a market where price is low and selling where it is high. (v) In the traditional approach, the cost of equity is independent of amount of debt. (True/ False) (vi) In practice, equity financing allows firm to go for cheaper sources of finance in future. (True/False) (vii) What is the value of a levered firm L if it has the same EBIT as an unlevered firm U, (with value of Rs 700 lakh), has a debt of Rs 200 lakh, tax rate is 35 per cent under MM approach? (a) Rs 770 lakh (b) Rs 500 lakh (c) Rs 630 lakh (d) Rs 900 lakh (viii) What is the value of an unlevered firm U if it has the same EBIT as a levered firm L, (with value of Rs 700 lakh), has a debt of Rs 200 lakh, tax rate of 35 per cent under MM approach? (a) Rs 770 lakh (b) Rs 500 lakh (c) Rs 630 lakh (d) Rs 900 lakh (ix) According to the traditional approach, what is the effect of increase in degree of leverage on the valuation of the firm? (a) Increases (b) Decreases (c) Remains Unaffected (d) Increases first and then decreases (x) According to NOI approach, with increase in debt/equity ratio the financial risk of equityholders (a) decreases (b) increases (c) no Change (d) depends on degree of leverage
