Questions from General Finance

Q: What does the term independence hypothesis mean as it applies to capital

What does the term independence hypothesis mean as it applies to capital structure theory?

Q: Define the EBIT-EPS indifference point.

Define the EBIT-EPS indifference point.

Q: Define the term financial leverage. Does the firm use financial leverage

Define the term financial leverage. Does the firm use financial leverage if preferred stock is present in its capital structure?

Q: Define the term operating leverage. What type of effect occurs when

Define the term operating leverage. What type of effect occurs when the firm uses operating leverage?

Q: What is the objective of capital structure management?

What is the objective of capital structure management?

Q: A cash budget is usually thought of as a means of planning

A cash budget is usually thought of as a means of planning for future financing needs. Why would a cash budget also be important for a firm that has excess cash on hand?

Q: Over the past eight decades, we have had the opportunity to

Over the past eight decades, we have had the opportunity to observe the rates of return and the variability of these returns for different types of securities. Summarize these observations.

Q: In the New York exchange market, the forward rate for the

In the New York exchange market, the forward rate for the Indian currency, the rupee, is not quoted. If you were exposed to exchange rate risk in rupees, how could you hedge your position?

Q: Discuss briefly the two perspectives that can be taken when performing a

Discuss briefly the two perspectives that can be taken when performing a ratio analysis.

Q: Identify three distinct ways that savings are ultimately transferred to business firms

Identify three distinct ways that savings are ultimately transferred to business firms in need of cash.