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Essay specific features

 

Issue:

Business

 

Written by:

Stanley T

 

Date added:

April 9, 2016

 

Level:

University

 

Grade:

A

 

No of pages / words:

1 / 255

 

Was viewed:

2565 times

 

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Essay content:

It is suggested that the firm’s capital structure (proportions of debt and equity) is irrelevant to wealth maximization of stockholders. Managers cannot alter the value of the firm by changing the proportion of the firm’s debt and equity in order to increase the required return. .The value of the firm is determined by the firm’s capital budgeting decisions...
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.The value of the firm is determined by the firm’s capital budgeting decisions. Capital structure determines only the proportion of debt and equity in the firm. Increasing the extent to which a firm uses debt increases both the risk to stockholders and the return they require. On the other hand, higher levels of debt also carry higher costs, which lowers the return on equity...
displayed 300 characters

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