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Unformatted text preview: b. ability of a firm to self-determine the amount of leverage they prefer in their capital structure. c. amount of debt a small firm arranges with their local bank. d. ratio of cash holdings of an individual as compared to their equity holdings. 5. Capital structure is irrelevant under MM with perfect capital markets as the value of the operating cash flows is unaffected by capital structure decisions. In practice, cash flows are not independent of these decisions. Explain why this could occur for a) a company which generates large free cash flow b) a company which is highly levered. Chapter 17 Questions : 4, 8, 12, 16, 17...
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This note was uploaded on 04/11/2011 for the course FINS 5514 taught by Professor No during the Three '11 term at University of New South Wales.
- Three '11