Flashcards in Chp7-Quiz Deck (10):
A flexibility crisis is a rare, unpredictable event
The quantitative ratio, that serves as an indicator of a firm's ability to meet contractual obligations is
The coverage ratio elements are
1) Interest Payment, 2) Tax Rate, and 3) Sinking Fund Obligations
Every financing alternative where the dilution effect on EPS of issuing new shares is matched exactly by the dilution resulting from interest payments on new debt is called
Risk involves rare, unpredictable events.
The status of the capital markets at the time that funding is needed is the FRICTO step of
Which of the following is not a step in FRICTO analysis?
Flexibility, Risk, and Income - all of the above are steps in FRICO analysis
The income step of FRICTO analysis addresses which of the following?
EPS dilution, Explicit Costs, and Implicit Costs - all of the above
Breakeven EBIT calculations enable managers to assess
The point at which EPS dilution is equal for two financing alternatives