2nd exam
Ey
問題一覧
1
Aggregation of items appearing on the left hand side of the balance sheet minus current liabilities except short term bank loans
Capital
2
refers to the mix of debt, preferred stock and ordinary (common) equity that the firm uses to finance the firm assets.
Capital Structure
3
The finance managers objective in making capital structure decisions is to find the financing mix that maximizes the value of the firm. This structure is called
Optimal Capital Structure
4
If a firm not currently at its target it may deliberately raise new money in a manner that moves the actual structure towards the target.
Deliberate Management Actions
5
Changes in market value of debt and/or equity capital could result in large changes in it's measured capital structure
Market Actions
6
suggests that a firm can lower its weighted average cost of capital and increase it's market value by the judicious use of financial leverage.
Traditional Approach
7
this theory suggests that there is a tradeoff between cheaper debt and higherpriced equity that leads to an optimal capital structure
Traditional Approach
8
one of major determinants of capital structure decisions
Control
9
There are two elements;
Business and Financial Risk
Risk
10
a firm should possess easing power to generate revenues not only to meet its cost of capital but also to finance it's future growth.
Cost of Capital
11
Capital Structure decision should always aim and having deby component in total component in order to increase the earning available for equity shareholders
Financial Leverage
12
Debt Capital is considered to have better flexibility than equity capital
TRUE
13
The debt has tax advantage over equity because interest charges are deductible from income and thereby could reducea firm's tax liabilities
TRUE
14
The time which the capital structure decision is taken will be influenced by the conditions of the economy
Timing
15
Refers to riskiness of the firms assets if no debt is used
Business Risk
16
refers to additional risk placed on the ordinary equity shareholders as a result of using debt
Financial Risk
17
Both Traditional and MM theories share several common assumptions.
1. Financing occurs only to two types of capital: long term debt and common stock
2. The firms investment decision is fixed but capital structure can be change
3. There are no taxes or bankruptcy costs
4. All earnings are paid out as dividends
5. No operating income (EBiT) is constant
6. Business risk is constant
TRUE
18
These Factors influencing capital structure;
- Control
- Risk
- Income
- Cost of Capital
- Financial Leverage
- Tax Consideration
- Timing
- Profitability
- Marketability
- Company Size
- Sales Stability
- Operating leverage
- Growth rate
- Management Attitude
TRUE
19
Exercise it's own judgment about the proper capital structure
Management Attitude
20
Factors that affect BUSINESS RISK;
- Variability of demand for firm's product
- Competition
- Variability of sales price
- Product obsolescence
- Variability of production costs
- Foreign risk exposure
- Legal exposure and regulatory risk
- Degree of oerating leverage
True
21
Involves a choice between risk and expected returns associated with the firms financing mix
Capital Structure Policy
22
one commonly used analytical technique used to evaluate various capital structures in order to select the one that maximizes a firm's earnings per share is the
EBIT-EPS Analysis
23
is the level of EBIT where EPS of a firm is the same, regardless of which alternative capital structures are employed.
Indifference point
24
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rz
Capm
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9問 • 1年前問題一覧
1
Aggregation of items appearing on the left hand side of the balance sheet minus current liabilities except short term bank loans
Capital
2
refers to the mix of debt, preferred stock and ordinary (common) equity that the firm uses to finance the firm assets.
Capital Structure
3
The finance managers objective in making capital structure decisions is to find the financing mix that maximizes the value of the firm. This structure is called
Optimal Capital Structure
4
If a firm not currently at its target it may deliberately raise new money in a manner that moves the actual structure towards the target.
Deliberate Management Actions
5
Changes in market value of debt and/or equity capital could result in large changes in it's measured capital structure
Market Actions
6
suggests that a firm can lower its weighted average cost of capital and increase it's market value by the judicious use of financial leverage.
Traditional Approach
7
this theory suggests that there is a tradeoff between cheaper debt and higherpriced equity that leads to an optimal capital structure
Traditional Approach
8
one of major determinants of capital structure decisions
Control
9
There are two elements;
Business and Financial Risk
Risk
10
a firm should possess easing power to generate revenues not only to meet its cost of capital but also to finance it's future growth.
Cost of Capital
11
Capital Structure decision should always aim and having deby component in total component in order to increase the earning available for equity shareholders
Financial Leverage
12
Debt Capital is considered to have better flexibility than equity capital
TRUE
13
The debt has tax advantage over equity because interest charges are deductible from income and thereby could reducea firm's tax liabilities
TRUE
14
The time which the capital structure decision is taken will be influenced by the conditions of the economy
Timing
15
Refers to riskiness of the firms assets if no debt is used
Business Risk
16
refers to additional risk placed on the ordinary equity shareholders as a result of using debt
Financial Risk
17
Both Traditional and MM theories share several common assumptions.
1. Financing occurs only to two types of capital: long term debt and common stock
2. The firms investment decision is fixed but capital structure can be change
3. There are no taxes or bankruptcy costs
4. All earnings are paid out as dividends
5. No operating income (EBiT) is constant
6. Business risk is constant
TRUE
18
These Factors influencing capital structure;
- Control
- Risk
- Income
- Cost of Capital
- Financial Leverage
- Tax Consideration
- Timing
- Profitability
- Marketability
- Company Size
- Sales Stability
- Operating leverage
- Growth rate
- Management Attitude
TRUE
19
Exercise it's own judgment about the proper capital structure
Management Attitude
20
Factors that affect BUSINESS RISK;
- Variability of demand for firm's product
- Competition
- Variability of sales price
- Product obsolescence
- Variability of production costs
- Foreign risk exposure
- Legal exposure and regulatory risk
- Degree of oerating leverage
True
21
Involves a choice between risk and expected returns associated with the firms financing mix
Capital Structure Policy
22
one commonly used analytical technique used to evaluate various capital structures in order to select the one that maximizes a firm's earnings per share is the
EBIT-EPS Analysis
23
is the level of EBIT where EPS of a firm is the same, regardless of which alternative capital structures are employed.
Indifference point
24
gdrsr
rz