JOURNAL OF FINANCE • VOL. LIII‚ NO. 4 • AUGUST 1998 Agency Costs‚ Risk Management‚ and Capital Structure HAYNE E. LELAND* ABSTRACT The joint determination of capital structure and investment risk is examined. Optimal capital structure ref lects both the tax advantages of debt less default costs ~Modigliani and Miller ~1958‚ 1963!!‚ and the agency costs resulting from asset substitution ~Jensen and Meckling ~1976!!. Agency costs restrict leverage and debt maturity and increase yield spreads
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stating that the method had “considerably less environmental impact than other conventional mining techniques” meaning there will be limited clean-up and waste management costs involved after mine closure. On top of this the process benefits from low costs due to reduced labour and capital compared to conventional mining practices. This does however mean even fewer jobs being created by the uranium mining Industry. If managed properly the land can also be easily be rehabilitated and used after mining has
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Does regular exercise reduce stress levels‚ and thus reduce symptoms of depression? There is a very complex relationship between stressful situations‚ our mind and body’s reaction to stress and the onset of depression. Some people develop depression after going through stressful events in their lives‚ such as the death of someone close‚ loss of job and other negative and traumatic problems that can cause large amount of stress (Prentiss‚ 2009). These problems make us experience a mixture of physical
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How much does it cost Noncompliance in Long Term Care cost- Healthcare Industry? In the United States Nursing or long term care facilities provide different levels of care depending upon a person’s needs. Generally‚ people who live in skilled nursing homes need a lot of care while those in residential care facilities do not. Compliance to local‚ state and federal regulations cost facilities thousands of dollars due to the fact that at risk populations have been compromised by poor health conditions
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How do sharks reduce drag? And what are the engineering applications? There are three types of drag present on the shark during locomotion. The first type of drag is known as frictional drag‚ which is the greatest element of drags in the shark. This is arises due to the friction created between the skin and the boundary layer and can be reduced with a condition that the boundary layer maintains a turbulent flow. The second type of drag is pressure drag‚ which causes by water deflecting off the moving
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How to Raise Capital for Your Business ( Etrepnuership) Launching a new business requires much skill and preparation. Entrepreneurs may not have the resources to raise capital in order to market their new business ideas; therefore‚ some great business ideas never become commercialized. This is a common dilemma that many entrepreneurs face. They often speculate about how to raise capital and same time‚ are unsure about how their startup will have the needed financial security to properly stay on
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QUESTION 3 Does Intellectual Property theft undermine the workings of the free market system? Yes‚ we look first what is Intellectual Property Right (IPR). World Trade Organization (WTO) said IPR are the right given to person over the creations of their minds. They usually give the creator an exclusive right over the use of his/her creation for a certain period of time. Then Free Market is a summary term for an array of exchange that takes place in society. Each exchange is a voluntary agreement
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Revenue means income. Allocation means to divide. Revenue allocation is defined as the division of available resources within an organisation or company. At a broader level‚ it is the process of assigning a cost to the amount of services and products generated. Government revenue is obtained from taxes‚ licenses and fees and allocated to public facilities. Because of the current revenue allocation formula in Nigeria‚ though there is a great deal of wealth in the country from the oil industry‚ 64%
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DEMAND (PED) & REVENUE Price elasticity of demand (PED) is particularly important to businesses‚ because of its effect on their revenue (income). Consider the following examples: 1) Mrs Robinson wants to increase her business’s revenue‚ but can’t decide whether she should increase or lower her prices. She currently charges £1 per unit and sells 1‚000 units. She knows that the PED for her product is (-) 0.4. What will happen to sales‚ sales revenue and profit if she: a) raises the price by 10%
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Case Analysis Report on: Compagnie du Froid Executive Summary This case study describes an ice cream manufacturer‚ Compagnie du Froid S.A.‚ founded by Jacques Truman’s father in 1985. It is a major competitor in the industry during summer and has presence in France‚ Italy and Spain. Compagnie du Froid practices decentralization in its organization‚ where each region is managed by a competent manager empowered to make business decisions in the best interest of the company. Traditionally‚ the
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