Question

In: Finance

Define the meaning of each letter of FRICTO, and give an illustration of each

Define the meaning of each letter of FRICTO, and give an illustration of each

Solutions

Expert Solution

Ans. FRICTO- Flexibility , Risk, Control, Timing , Other

Fricto: Factor is analysing long term Capital Structure

1. Flexibility : Flexibility means company ability for access in the financial market . It means company able to raise fund, company have the acess in financial market. can also take financing type of its liking .

2. Risk: The alternative choices on the risk the company and its stakeholder are exposed, for taking for debt its is risk of both creditor and shareholder.

3. Income: A company EBIT is above its financing indifference point will be able to increase its earning per share by taking additional debt.

4. Control: Amount of control over the company by each shareholder , in general issuing addional share for reducing the control over the company.

5. Timing: From time to time financial market shifted from one preferred market to another market thereby affecting company debt and equity mix choices.

6. Other: The impact of Alternative financing choices on other issue or the impact on such issue on these choices , for example the potential reduction in the cost and risk of debt financing that would be brought about by positng collateral.


Related Solutions

Define the meaning of deregulating an industry and give a brief explanation as to why the...
Define the meaning of deregulating an industry and give a brief explanation as to why the government might regulate an industry in the first place
1) Describe the four characteristics of empowered employees, and give an illustration for each that shows...
1) Describe the four characteristics of empowered employees, and give an illustration for each that shows how an employee would feel or behave if their work role has this characteristic. 2) Using examples, identify and describe the five conflict management strategies and the accompanying behaviours.
What are the four market types? Give an illustration of each. From a social standpoint, what...
What are the four market types? Give an illustration of each. From a social standpoint, what is the problem with monopoly? Discuss this using an example for illustration PLEASE DONT TAKE OTHER PEOPLE'S ANSWER
quasi experimental versus experimental research with clear illustration of the meaning of control group
quasi experimental versus experimental research with clear illustration of the meaning of control group
Identify and give an illustration of one type of implied warranty.
Identify and give an illustration of one type of implied warranty.
1. Define HTML and what each letter means. Also, define JavaScript. (Write at least one (1)...
1. Define HTML and what each letter means. Also, define JavaScript. (Write at least one (1) paragraph (one paragraph contains 5 to 7 sentences). 2.Define Excel. What would you use Excel for? (Write at least one (1) paragraph (one paragraph contains 5 to 7 sentences).
Give examples–a formula and an illustration–of two-dimensional vector fields F⃗(x,y) with each of the following properties....
Give examples–a formula and an illustration–of two-dimensional vector fields F⃗(x,y) with each of the following properties. You could do the illustrations by hand. a) The direction of F⃗ is constant but the magnitude is not constant. b) The magnitude |F⃗| is constant but the direction is not constant. c) All the vectors F⃗ along a horizontal line are equal, but F⃗ is not constant overall. d) F⃗ (x, y) is perpendicular to xˆi + yˆj at every point (x, y)....
Summarize the strategic hands for problem-solving, and give an example of the meaning of each one...
Summarize the strategic hands for problem-solving, and give an example of the meaning of each one which of the following best summarizes the strategic hand there may be more than one strategy and provide an example of the meaning A there may be several strategies to solving the problem, however only one of them will find the correct answer. For example, there is more than one strategy to stop exit squared plus 3X +2 = 0 however, only one of...
a) Definition of terms.Please briefly give the meaning of each of the following terms: 1. colligative...
a) Definition of terms.Please briefly give the meaning of each of the following terms: 1. colligative property 2. vapor pressure 3. semi-permeable membrane 4. osmosis 5. dialysis
Define each of Weber's three types of authority and give an example of each.
Define each of Weber's three types of authority and give an example of each.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT