Why do we use leverage if it increases the risk of a firm?
What will be an ideal response?
Answer: Usually, the cost of debt is cheaper than the cost of equity due to lower risk of the debt holders as well as tax deductibility of interest payment. Thus, including debt, everything else remaining same, reduces the cost of capital for a firm.
Business
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International bond funds
A) focus on bonds issued by non-U.S. firms or governments. B) may hold bonds that offer a higher yield than U.S. bonds. C) are subject to exchange rate risk. D) All of the above are correct.
Business
Your firm has an 8-bit network part and an 8-bit subnet part. How many hosts can you have per subnet?
A) 126 B) 254 C) 534 D) 65,534
Business