Kale et al (1991) suggests that the level of risk is one of the main determinants of a firm`s capital structure. By looking at the trade off theory we might expect a negative association when risk and leverage are concerned. If firms have high earnings volatility‚ for some obvious reasons‚ they would not want to indulge in debt financing. It follows that when firms are exposed to bankruptcy and agency costs greater is the incentive to reduce the level of debt otherwise the more volatile a firm`s
Premium Finance Debt Corporate finance
CAPITAL STRUCTURE MANAGEMENT IN NEPAL (A CASE STUDY ON NABIL‚ NIBL‚ NEA‚ NTC & HGICL) Table of Contents: Recommendation I Viva- Voce Sheet II Declaration III Acknowledgement IV List of Figures V List of Tables VI Abbreviation VII CHAPTER I. INTRODUCTION Pg No. 1. Background of the study
Premium Finance Capital structure Corporate finance
Chapter 12 Capital Structure and Leverage LEARNING OBJECTIVES After reading this chapter‚ students should be able to: • Explain why capital structure policy involves a trade-off between risk and return‚ and list the four primary factors that influence capital structure decisions. • Distinguish between a firm’s business risk and its financial risk. • Explain how operating leverage contributes to a firm’s business risk and conduct a breakeven analysis‚ complete with
Premium Capital structure Weighted average cost of capital Debt
Capital Structure and Profit Capital Structure Definition A unite of a company’s long-term debt‚ specific short-term debt‚ common equity and preferred equity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds. Debt comes in the form of bond issues or long-term notes payable‚ whereas equity is classified as common stock‚ preferred stock or retained earnings. Also‚ Short-term debt such as working capital requirements is considered
Premium Finance
Capital Structure Practice Problems 1. Hayfin Enterprises has the following operating results and capital structure: Hayfin Enterprises ($000s) | | | Financial Data | | Revenue | $ 6‚000 | Operating Expenses | $ (4‚500) | EBIT (Operating Profit) | $ 1‚500 | | | Debt | $ 1‚200 | Equity | $ 8‚800 | Total Capital | $ 10‚000 | Interest rate on debt = 9% Share price = $25 (MV = BV) The firm is contemplating
Premium Finance Debt Stock market
competition like in the online auction industry? How strong are the competitive pressures confronting eBay and other online auction firms? 2.2 What forces are operating in the online auction macro-environment that has the power to alter the nature and structure in the online auction industry? 2.3 What does a strategic group map reveal about the positions of the major players in the online auction industry? Is eBay in a good position on the map? Why or why not? Who are the closest competitors? 2.4 What do
Premium Management Strategic management Marketing
4. eBay is positioned well to successfully compete with its top three competitors‚ Amazon‚ Google and Overstock. Table 1 provides a financial comparison of eBay with its top three competitors. eBay is a distant third from Google with a market capitalization of $64 billion but is first or second in key ratio comparisons (eBay Direct Competitor‚ 2012). Specifically‚ eBay is first or second in several key ratios such as Gross Margin‚ Operating Margin‚ Earnings Per Share and Price/Earnings. The Operating
Premium Brand Branding Brand management
deirektor: Džon J. Donahju Konkurencija: amazon‚ Google‚ Overstock.com eBay is an online marketplace where both individuals and businesses can buy and sell goods and services to people around the world. One important thing to note is that eBay only provides the platform for buyers and sellers to meet. This means that eBay does not keep stocks of goods‚ nor do they dispatch your purchase to you. Anything that you buy from eBay will come to you direct from the seller that you are transacting with
Premium
Module : Organisational Behaviour and Design (IBMMO409FT) Group : IBMS216FM Case name : eBay Group members : Jeroen Dorst (0849963) Chun-Hou Ip (0850229) Fritzgerald Koeiman (0837237) Martijn Roos (0812417) Discussion questions 1. What are the ethical responsibilities of an organisation such as eBay? The ethical responsibilities of an organisation such as eBay are different from those of an organisation that directly sells their services or products
Premium Management Leadership
Notes to Consolidated Financial Statements (continued) complaints‚ which assert varying claims‚ including breach of contract‚ and violations of ERISA‚ state and federal law‚ all allege that the prices BNY Mellon charged and reported for standing instruction foreign exchange transactions executed in connection with custody services provided by BNY Mellon were improper. In addition‚ BNY Mellon has been named as a nominal defendant in several derivative lawsuits filed on various dates in 2011 and 2012
Premium Derivative Derivatives Foreign exchange market