Question

In: Finance

True or False: Everything else equal, the higher a firm’s DFL, the closer it is to...

True or False: Everything else equal, the higher a firm’s DFL, the closer it is to its operating breakeven point

Solutions

Expert Solution

Answer : The above mentioned statement is false.


Related Solutions

Which of the following statements is likely to be true? A)Everything else equal, an increase in...
Which of the following statements is likely to be true? A)Everything else equal, an increase in the supply of dollars in exchange for pesos will cause the dollars to depreciate against the pesos and will decrease the quantity of dollars being traded in the foreign exchange market. B)If a country wants to keep the domestic currency overvalued against a foreign currency, it will buy the domestic currency and sell the foreign currency. C)If a country wants to keep a foreign...
Which of the following is true? a. Everything else remaining constant, the present value of a...
Which of the following is true? a. Everything else remaining constant, the present value of a future lump sum payment will increase if the time period declines. b. Everything else equal, you will accrue more interest if you choose to invest using simple interest versus compound interest. c. Everything else held constant, if the number of payments related to an annuity due increase, so will the present value of the annuity. d. All else equal, the future value of an...
All else equal, the more people save, the higher the demand for debt capital will be,...
All else equal, the more people save, the higher the demand for debt capital will be, resulting in higher interest rates. Group of answer choices True False
1.      (True/False. Explain) Longer the duration of the loan, higher the interest rate. 2.      (True/False. Explain) higher the...
1.      (True/False. Explain) Longer the duration of the loan, higher the interest rate. 2.      (True/False. Explain) higher the risk of the loan, lower the interest rate. 3.      (True/False. Explain) $1 today is worth more than $1 tomorrow. 4.      What is Initial Public Offering (IPO)? Can you buy one from another investor? 5.      What is crowdfunding?
1. Which of the following statements is true? Select one: a. holding everything else constant, an...
1. Which of the following statements is true? Select one: a. holding everything else constant, an increase in planned investment spending shifts the AE function downward, leading to a higher level of GDP b. Most recessions start with a decrease in investment spending. c. Economists think that decreases in consumer spending often follow decreases in investment spending. d. Answers (a), (b), and (c) are all true e. Answers (b) and (c) are both true 2. An increase in the market...
1) TRUE or FALSE. Small volumes of air resonate to a higher frequency. TRUE or FALSE....
1) TRUE or FALSE. Small volumes of air resonate to a higher frequency. TRUE or FALSE. Large volumes of air resonate to a higher frequency. TRUE or FALSE. Resonance initiates the vibration. 2A. What is the natural frequency of a female who’s vocal tract is 15cm long, closed at one end and opened at the other. B. What is the second harmonic in question A: c. Would the frequency change if both ends were closed with a vocal tract of...
b)Everything else equal, which annuity has the greater future value: an     annuity or an annuity due?...
b)Everything else equal, which annuity has the greater future value: an     annuity or an annuity due? Why? c) What is the difference between an ordinary annuity and an annuity due d) All else equal, which annuity has the greater present value: an ordinary annuity or an annuity due? Why?
It is generally true that when the price of a good is increased (all else equal)...
It is generally true that when the price of a good is increased (all else equal) the quantity demanded of that good will decline and the revenue from the sales of the good will also decline. There are exceptions, however, where price increases result in a reduction in the quantity demanded but revenue increases. Explain in detail the types of situations in which the exceptions occur. Define all the relevant terms
All else equal, firms with higher leverage (D/E ratio) tend to have higher betas. However, when...
All else equal, firms with higher leverage (D/E ratio) tend to have higher betas. However, when firms are heavily levered (near the “zone of insolvency” or bankruptcy), their betas tend to drop significantly. Without mentioning anything about the equation for beta, briefly explain why this phenomenon might occur.
Discuss briefly and comment for accuracy the following statements. “All else equal, higher depreciation expenses will...
Discuss briefly and comment for accuracy the following statements. “All else equal, higher depreciation expenses will result in larger FCF and lower net income. The specific impact can be discerned by multiplying the incremental depreciation expense by tax rate.”
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT