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Questions and Answers
Which industry characteristic affects the optimal structure by requiring intense capital investments?
Which industry characteristic affects the optimal structure by requiring intense capital investments?
- Variability of the credit spread
- Stability of EBIT
- Variability longitudinally of the TIE Ratio
- Magnitude of P, P, & E investment (correct)
Which of the following is NOT a factor affecting optimal capital structure?
Which of the following is NOT a factor affecting optimal capital structure?
- Industry characteristics
- Shareholders’ risk profiles
- Relative geographical location (correct)
- Management risk profiles
What is the TIE Ratio?
What is the TIE Ratio?
- Times Interest Earned (correct)
- Total Investment Earnings
- Total Interest Expenses
- Total Income Earnings
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