1. how capital structure affects the value of a firm? 2. what are the Modigliani and Miller’s...

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Finance

1. how capital structure affects the value of afirm?
2. what are the Modigliani and Miller’s capitalstructure theories?
3 What have been the trends fordividend payments and stock buybacks (repurchases) over the past 25years?
4 How do employee stockprograms dilute the ownership of other stockholders? How do stockrepurchases neutralize this effect?
5 What is rule 10b-18, what is itsmajor provisions, and what is the goal of the rule?
6 Why is it important to focus on “operating” earnings,assets, and liabilities when calculating the value of a firm(especially for mergers and acquisitions)?
7 How are synergies from mergers and acquisitionsincorporated into the free cash flows to the firm?
8 How does the choice of capital structure (and theresulting WACC) affect the value of the firm?
9 How are mergers and acquisitions paidfor?

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Answer1 Capital structure decision involves the mix of equity and debt in the company company needs funds to finance its operations and capital expenditures for that purpose company raises funds from the market by issuing share capital or bonds or takes loan from banks Ratio of debt and equity in the firms capital structure affects the value of firm If a companys capital structure has more debt it brings obligation and interest burden if equity is more then company has to pay dividend to its See Answer

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1. how capital structure affects the value of afirm?2. what are the Modigliani and Miller’s capitalstructure theories?3 What have been the trends fordividend payments and stock buybacks (repurchases) over the past 25years?4 How do employee stockprograms dilute the ownership of other stockholders? How do stockrepurchases neutralize this effect?5 What is rule 10b-18, what is itsmajor provisions, and what is the goal of the rule?6 Why is it important to focus on “operating” earnings,assets, and liabilities when calculating the value of a firm(especially for mergers and acquisitions)?7 How are synergies from mergers and acquisitionsincorporated into the free cash flows to the firm?8 How does the choice of capital structure (and theresulting WACC) affect the value of the firm?9 How are mergers and acquisitions paidfor?