Asked by
Amiracle Nelson
on Dec 09, 2024Verified
All else the same, taxes and bankruptcy claims on the cash flows of the firm will tend to increase with decreases in the debt/equity ratio?
Taxes
Mandatory monetary payments or fees imposed by the government on people or organizations to finance public spending.
Bankruptcy Claims
Financial demands made by creditors against a debtor who has declared bankruptcy.
Debt/Equity Ratio
The financial ratio that illustrates the use of shareholders' equity versus debt in funding company assets.
- Know the implications of taxes and bankruptcy claims on firm cash flows and capital structure decisions.
Verified Answer
TP
Learning Objectives
- Know the implications of taxes and bankruptcy claims on firm cash flows and capital structure decisions.