University of Technology

School of Business Administration

Corporate Finance

 

Tutorial #2 - Capital Structure & Leverage - Chapter 14

     

  1. Explain why capital structure policy involves a trade-off between risk and return

  2. List the four primary factors that influence capital structure decisions.

  3. Distinguish between a firm’s business risk and its financial risk.

Questions

  1. 14-9

  2. 14-10

  3. 14-11

Problems

  1. 14-1

  2. 14-5

  3. 14-14

  4. 14-7

  5. 14-8

  6. 14-9

  7. 14-12

  8. 14-13

  9. 14-2

  10. 14-10

  11. 14-3

  12. 14-15

  13. 14-16

Questions

  1. 14-13

 

  1. Briefly explain "Trade-Off Theory" , "Signaling Theory" & "Reserve Borrowing Capacity"

 

 

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