University of Technology
School of Business Administration
Corporate Finance
Tutorial #2 - Capital Structure & Leverage - Chapter 14
Explain why capital structure policy involves a trade-off between risk and return
List the four primary factors that influence capital structure decisions.
Distinguish between a firm’s business risk and its financial risk.
Questions
14-9
14-10
14-11
Problems
14-1
14-5
14-14
14-7
14-8
14-9
14-12
14-13
14-2
14-10
14-3
14-15
14-16
Questions
14-13
Briefly explain "Trade-Off Theory" , "Signaling Theory" & "Reserve Borrowing Capacity"