Quiz Ch 13 – Determining Factors of Business Risk
Fundamentals of Financial Management, Concise
Brigham and Houston
09th Edition
Among the following options, which is NOT directly linked to (or does not directly influence) business risk?
Among the following options, which is NOT directly linked to (or does not directly influence) business risk?
An increase in the debt ratio will typically NOT impact which of the following?
Among the given options, which factor is likely to raise a firm’s target debt ratio, assuming other factors remain constant?
Among the following, which event is likely to prompt a company to raise its target debt ratio, all else remaining constant?
Identify the optimal capital structure from the given data:
What is the purpose of the firm’s target capital structure?
True or false: Varied borrowers possess distinct bankruptcy risks; in the event of borrower bankruptcy, lenders are unlikely to recover the complete loaned amount. Consequently, lenders demand higher rates from borrowers deemed more prone to bankruptcy.
True or false: Capital structure decisions are governed by the trade-off theory, which asserts that these decisions entail balancing the advantages and drawbacks of debt financing.
True or false: The discussed text states that a firm’s capital structure has no influence on its free cash flows since FCF solely encompasses operating cash flows, which are accessible for servicing debt, distributing dividends to shareholders, and other applications.