Financial Management: Theory and PracticeDryden Press, 1999 - Business & Economics To accomplish your course goals, use this study guide to enhance your understanding of the text content and to be better prepared for quizzes and tests. This convenient manual helps you assimilate and master the information encountered in the text through the use of practice exercises and applications, comprehensive review tools, and additional helpful resources. |
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Page 79
... firms , these two effects combine to push Firm L's expected rate of return on equity up far above that of Firm U. Thus , debt can be used to " leverage up " the rate of return on equity . However , financial leverage can cut both ways ...
... firms , these two effects combine to push Firm L's expected rate of return on equity up far above that of Firm U. Thus , debt can be used to " leverage up " the rate of return on equity . However , financial leverage can cut both ways ...
Page 394
... firm because of the difficulty of estimat- ing dividends and growth rates . The second method , which calls for adding a risk premium of 3 to 5 percent to the firm's cost of debt , can be used for some small firms , but problems arise if ...
... firm because of the difficulty of estimat- ing dividends and growth rates . The second method , which calls for adding a risk premium of 3 to 5 percent to the firm's cost of debt , can be used for some small firms , but problems arise if ...
Page 614
... firm's weighted average cost of capital ? c . The firm can increase its debt by $ 8 million , to a total of $ 10 million , using the new debt to buy back and retire some of its shares . Its interest rate on all debt will be 12 percent ...
... firm's weighted average cost of capital ? c . The firm can increase its debt by $ 8 million , to a total of $ 10 million , using the new debt to buy back and retire some of its shares . Its interest rate on all debt will be 12 percent ...
Contents
INTRODUCTION TO FINANCIAL MANAGEMENT | 1 |
AN OVERVIEW OF FINANCIAL MANAGEMENT | 3 |
FINANCIAL STATEMENTS CASH FLOW AND TAXES | 31 |
Copyright | |
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Common terms and phrases
12 percent after-tax analysis annual annuity assume average balance sheet bank beta beta coefficient bonds capital budgeting capital gains capital structure CAPM Chapter coefficient common equity common stock company's corporate cost of capital cost of equity coupon decision depreciation discussed dividend policy dollar EBIT effect Equation estimate example expected rate expected return financial calculator Financial Management firm firm's fixed assets flotation costs forecast free cash flow funds future growth rate higher income increase inflation interest rates inventory investment investors issue lease leverage loan long-term market risk market value maturity MicroDrive MicroDrive's million NOPAT Note operating option payments payout portfolio preferred stock present value problem profit rate of return required rate retained earnings risk premium risk-free rate risky securities SELF-TEST QUESTIONS sell share shareholders short-term stock price stockholders tax rate WACC yield yield to maturity zero