5. Determining the proper ratio of long-term debt-to-equity is an important contributor to a company?s value in the marketplace (and therefore to the wealth of the shareholders). The Trade-Off Theory offers a lot of guidance to how a company should be financed. Yet other important factors that can influence the decisions are an EBIT/EPS analysis and ?qualitative factors.? Explain (1) how each of these three items influence the capital structure decision, and (2) in what order they should be considered.
Paper#4057 | Written in 18-Jul-2015Price : $25