Why would a company decide to pay investors cash? What are the two ways to give cash back to investors and talk about the trade-off of those two regarding: Tax considerations Share price support/signaling Flexibility

Q: In which of the following ways can you not take money out of your company? Selling the company to…

A: Ques 23 - Ways you cannot take money out of your company: Selling the company to employees is done…

Q: How to use Return on Equity ratio to determaine whether a company needs to issue stocks or bonds to…

A: Return on equity is a ratio which is used by companies to measure financial performance and helps…

Q: Explain "free cash flows." Why do managers like to retain free cash flows instead of distributing it…

A: Free cash flows (FCF) equals the amount left with the company after the required payments to the…

Q: Which of the following statements support reasons that companies make investments? Select all that…

A: Introduction:- Companies make investment for getting income from non operating activities.…

Q: How does additional debt in a firm influence its WACC? its free cash flow (FCF)? the agency costs of…

A: Debt is the presence of additional financial leverage in the total business and it will be having…

Q: Which of the following is not a determinant of investment? a) The efficiency of capital equipment…

A: To increase capital assets, business do investments in property, fixed assets, financial market,…

Q: How can the optimization of a mutltinational corporation cash flow distort the profits of a…

A: International cash management's functions include investing extra cash and maximizing cash flow…

Q: The investment banks collect money from public, because O a. Business sells products. O b. Business…

A: Investment bank is referred as the bridge between large enterprises and investors. It aims to…

Q: In what circumstances would you choose to use a dividend discount model rather than a free cash flow…

A: dividend discount models are used in companies to value the stock of rapidly growing companies but…

Q: Shortening the cash conversion cycle always enhances the shareholder value

A: Note: Hi! Thank you for the question As per the honor code, We’ll answer the first question since…

Q: What rate do investors use to discount the capital gains and cash flows of firms?

A: Discounted cash flow estimates the present value of an asset by using projected cash flows.…

Q: How would rising interest rates, that increase the weighted average cost of capital  (WACC) impact…

A: Weighted average cost of capital is the average cost of capital weighted by the proportion of the…

Q: The suitable model to value a firm that has consistent earnings growth, but varies how it pays out…

A: Total Payout model If you want to value a firm that has consistent earnings grow, but varies how it…

Q: Which of the following statements is not correct? Group of answer choices A)Purchasing fixed assets…

A: A)Purchasing fixed assets using cash decreases the current ratio. Purchasing fixed asset using cash…

Q: Discuss the usefulness of the DuPont Analysis in analyzing the drivers of companies’ profitability.…

A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…

Q: Describe the two possible market signals that investors perceive from a firm announcing an increase…

A: Dividend refers to that portion of the profits of the company which is distributed among the…

Q: Which of the following statements is NOT CORRECT? why?   The corporate valuation model can be used…

A: Corporate Valuation Model(CVM) is used to ascertain market value of business entities. CVM includes:…

Q: Should a firm pay higher dividend or lower dividend? Support your answer in light of bird in hand,…

A: Dividend refers to the amount paid to the shareholders on each share purchased by them. The dividend…

Q: Does it ever make sense for a profitable company with positive cash flow to seek external financing?…

A: External financing is any kind of business funding you acquire from sources outside the company.…

Q: Discuss the advantages and disadvantages of options in the financial markets?

A: Hey, since there are multiple questions posted, we will answer the first question. If you want any…

Q: Why do equity investors often use borrowed funds? Explain positive and negative financial leverage…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: political risk to a company's bottom line?

A: Introduction: Political risks can be defined as those risks which would be faced by the investors or…

Q: Financial markets: efficient and other.  How are financial firms able to make profits? Under what…

A: Introduction: Usually, financial institutions such as banks and insurance providers raise and pool…

Q: When looking to invest corporate dollars, is the top-down approach is preferred over the bottom-up…

A: Answer: Corporations are exposed to factors which are related to macroeconomic. Therefore, while…

Q: A firm’s value depends on its expected free cash flow and its cost of capital. Distributions made in…

A: The correct answer is the last option i.e. Dividend irrelevance theory

Q: What are the company motives for declaring dividends or stock repurchase programs? 2. How would you…

A: Because you have asked multiple questions, we will solve the first question as per the policy of…

Q: Critically discuss the effect of increasing the amount paid upfront when corporations make capital…

A: Capital purchases refer to the expenses a company makes for buying new equipments, improving long…

Q: There are various methods and techniques to pay dividend to shareholders. How would these…

A: There are various method of payment for dividends such as: Through cash (either through electronic…

Q: the effects of increasing the amount paid upfront when corporations make capital purchases with a…

A: Capital expenditure is an expense, that generates profits for a longer period of time which can be…

Q: Why is understanding the relationship between the cash conversion cycle (CCC) and net working…

A: CCC is a time period in which inventory, account receivables and other resources convert into cash…

Q: The internal rate of return (IRR) can best be described as: A. the discount rate at which a set of…

A: It is one of capital budgeting discounting techniques which is used as a metric in financial…

Q: Compare Dividend Valuation Model with Capital Asset Pricing Model in the context of calculating cost…

A: The dividend discount model and the capital asset pricing model are two methods for estimating cost…

Q: Explain the theory behind the free cash flow valuation approach. Why are the free cash flows value…

A: The free cash flows valuation approach will be a theory for determining a company's intrinsic value,…

Q: Which of the followings proposes that there is a tradeoff between level of borrowing and benefit of…

A: As per company policy in case of multiple questions it is possible to solve only one question.

Q: In case you retain huge amount of profit of your company for long term investment, what financial…

A: Given that the company retained a huge amount of profit for long term investment.

Q: How does a cost-efficient capital market help reduce the prices of goods and services? Describe the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Companies that face large investments they cannot finance internally through the retention of…

A: Floatation costs are the expenses incurred to raise capital such as, brokerage fee, underwriting…

Q: Which of the following will increase the WACC for a tax-paying company? Decrease the proportion of…

A: WACC or the weighted average cost of capital implies for the cost incurred for raising the total…