Debt is nearly always a less costly source of financing than equity. Does it follow then that most firms could decrease their WACC if they simply used more debt and less equity in their capital structure?
What will be an ideal response?
Using more debt could possibly lower the WACC, but it is not certain that this will be the outcome. Debt is less costly than equity, but using more debt increases the cost of the equity that remains in the firm. Therefore, there is a tradeoff here. Think about a firm that borrows money to repurchase some of its outstanding stock. The cost of the new debt will be lower than the cost of the equity retired, but the cost of the equity that remains will be higher than it was before. It is unclear whether the net effect of this will be to increase or decrease the WACC, or even leave it unchanged.
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What is a requirement under the Immigration Reform and Control Act of 1986?
A. Employers must verify and maintain records on the legal rights of applicants to work in the United States. B. Employers must verify the legal age of employees who do not hold American citizenship. C. Employers must ask a potential employee's religion. D. Employers must pay lower wages to immigrant workers. E. Employers must file a completed Form I-9 with the Immigration and Naturalization Service and retain the documents for at least ten years.
Projecting a positive personal image is a crucial element in communicating an "I care" attitude to customers.
Answer the following statement true (T) or false (F)
The primary forces that shape the needs of consumers are demographic influences, lifestyle influences, and usage behaviors
Indicate whether the statement is true or false
While making a sales presentation to the head of a local company, Jenny discovers that the head is routinely stopped and delayed at airport security because of a joint replacement that sets off alarms but doesn't show up easily in the x-ray machines
This adds another 3-4 hours to some trips, and has caused him to miss 10 flights in the previous year. This conversation is: A) need identification B) relationship building C) price negotiation D) qualifying the prospect E) post-sales service