“DETERMINANTS OF CAPITAL STRUCTURE IN PAKISTAN” Capital structure refers to the combination of asset financing from different available sources. Normally the companies have two choices‚ either to finance the assets from internal source that is termed as retained earnings or from external source that splits into debt and equity. A firm’s capital structure is than the composition of its liabilities. In reality‚ capital structure of firms may be highly complex and consist of number of sources. These
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1. Which of the following would increase the likelihood that a company would increase its debt ratio in its capital structure? a. An increase in costs incurred when filing for bankruptcy. b. An increase in the corporate tax rate. c. An increase in the personal tax rate. d. None of the statements above is correct. ANSWER: B An increase in the corporate tax rate would mean that firms would get larger tax breaks for interest payments. Therefore‚ firms have an incentive to increase interest payments
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love places like Home Depot‚ Costco‚ and Lowes? Sure you do! They’re great places to buy wholesale items‚ home improvement materials or simply to just walk around. But did you know you’re not alone in liking these places? According to a new study‚ even the rich love shopping at these places. Maybe we’re not so different after all. RICH PEOPLE PICK COSTCO AND HOME DEPOT OVER NAME BRAND ITEMS A new study from Minitel shows that even wealthy consumers love the Costco and Home Depot brand items you
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case study will focus on the proposed capital structure decisions of Diageo. 2) Is Diageo’s current capital structure appropriate to its new business? It believes that it has traditionally had a conservative debt policy. If so‚ is that policy still appropriate? Has Diageo’s capital structure been as conservative as it believes? (What interest rate coverage ratio has it been targeting? How does it look relative to its competitors?) Diageo’s capital structure has not been as conservative as it
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Solution 1: (i) P0 = D1 Ke - g CA – IPC TEST CAPITAL STRUCTURE = 3.50 (1.06) 0.15 – 0.06 = `41.22 (ii) Ke = D1 + g P0 0.15 = 3.50 (1 + g) + g 50 7.50 = 3.50 + 3.50g + 50g g= 4 = 7.48% 53.5 Solution 2: (i) Determination of EPS at EBIT level of `22‚00‚000 Financing Plan (a) (b) Equity Shares (`) Debentures (`) Pref. EBIT 22‚00‚000 22‚00‚000 Less: Interest (16‚000) (1‚21‚000) Taxable Income 21‚84‚000 20‚79‚000 Less: Tax @ 30% (6‚55‚200) (6‚23‚700) EAT 15‚28‚800 14‚55‚300 Less: Dividend on Pref
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CHAPTER 1 The Importance of Business Ethics SUMMARY This chapter provides an overview of the field of business ethics. It develops a definition of business ethics and discusses why it has become an important topic in business education. It also examines the evolution of business ethics in North America and explores the benefits of ethical decision making in business. Finally‚ the chapter provides a framework for examining business ethics in this text. LECTURE OUTLINE I. Business Ethics
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MKTG 1010 Targeting The College Age Apparel Market When it comes to vying for the hearts‚ minds and money of America’s teens and twenty-somethings‚ there are a few strategies that can be used that are tried and true. As we look at the two retailers‚ Abercrombie & Fitch and American Eagle‚ it’s clear that they go after the same target market while maintaining a much different approach from each other. When a customer walks towards an Abercrombie and Fitch store (or their teen marketed brand
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Assignment 2: Business Financing and the Capital Structure Principles of Finance Finance 100 December 12‚ 2013 Business Financing and the Capital Structure Raising Business Capital As a financial advisor to this business there are two options to consider for raising business capital‚ equity financing and debt financing. The details‚ advantages‚ and disadvantages of both options will be provided. Also information about raising capital by selecting an investment banker
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American Home Products Corporation1. CASE SUMMARYAHP Chief Executive"I just don ’t like to owe money"‚ said William F. Laporte‚ AHP chief executive‚ when asked about his company ’s almost debt-free balance sheet and growing cash reserves. Mr. Laporte had taken over as chief executive of American Home Products in 1964. Throughout 17 subsequent years of his tenure Mr. Laporte has not changed his opinion of debt financing and AHP ’s abstinence from debt continued‚ while the growth in its cash balance
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are two suggestions that you would give a retailer that caters mostly to men (e.g.‚ The Home Depot‚ Best Buy) to be better at attracting female shoppers? (Please make sure to expand on what the author proposes‚ simply repeating what he says will earn you zero points for this question). The first thing these stores can do is hire more females as employees. If a woman is newly divorced and enters The Home Depot to fix her broken deck and only sees male employees‚ she is likely to be discouraged about
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