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Hello, I'm an MBA student who needs assistance wit...

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Hello, I'm an MBA student who needs assistance with answering the following questions from a corporate finance course: Chapter 15 15-3. Firms with relatively high nonfinancial fixed costs are said to have a high degree of what? 15-4 "One type of leverage affects both EBIT and EPS. The other type affects only EPS." Explain this statement. 15-6. Why do public utility companies usually have capital structures that are different from those of retail firms? 15-7. Why is EBIT generally considered to be independent of financial leverage? Why might EBIT actually be influenced by financial leverage at high debt levels? Chapter 19: 19-2. Distinguish between operating leases and financial leases. Would you be ore likely to find an operating lease employed for a fleet of trucks or for a manufacturing plant? 19-3 Would you be more likely to find that lessees are in high or low income tax brackets as compared with lessors? 19-5. One alleged advantage of leasing voiced in the past is that it kept liabilities off the balance sheet thus making it possible for a firm to obtain more leverage than it otherwise could have. This raised the question of whether or not both the lease obligation and the asset involved should be capitalized and shown on the balance sheet. Discuss the pros and cons of capitalizing leases and related assets. 19-7. Suppose Congress enacted new tax law changes that would (1) permit equipment to be depreciated over a shorter period, (2) lower corporate tax rates, and (3) reinstate the investment tax credit. Discuss how each of these potential changes would affect the relative volume of leasing versus conventional debt in the U.S. economy. All questions are from chapters 15 & 19 of the following text: "Intermediate Financial Management" (Brigham & Daves (2010) 10 edition) The deadline can be extended to 5pm est. Thank you very much. Your assistance is greatly appreciated.,Wonderful. Thank you for accepting the assignment.,Hello Rachel, I didn't catch the answer to the second part of question 19-2 (Would you be more likely to find an operating lease employed for a fleet of trucks or for a manufacturing plant?): Chapter 19: 19-2. Distinguish between operating leases and financial leases. Would you be more likely to find an operating lease employed for a fleet of trucks or for a manufacturing plant? In Finance Lease all the risks and rewards are transferred to the lessee while in the operating lease it is not transferred. In finance lease, the lease is raised primarily to pay for the assets while in operating lease, it is just to pay for the rental Did I miss something? Thanks.

 

Paper#8618 | Written in 18-Jul-2015

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