Mindi O ngor ng ge.com/static rb/Vindex.html?nbId=60767480 bNodeld-222524532&eIS
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Question
Mindi O ngor ng ge.com/static rb/Vindex.html?nbId=60767480 bNodeld-222524532&eISBN; (- Find on page Based on your understanding of the capital structuaNo results Understanding the impact of debt in the capital structure Suppose you are conducting a workshop on capital structure dedisions and you want to highlight certain key issues our session, but he thinks he might have related to capital structure. Your assistant has made a list of points for y made some mistakes. Review the list and identify which items are correct. Check all that apply. 0990000414000 Workshop Talking Points In an event of liquidation, creditors will get their dams over a firm's assets before common shareholders Interest paid on debt is deducted from a firm's pretax income, thus reducing the amount of taxes that it owes. A decrease in debt financing increases the risk of bankruptcy, and managers are encouraged to invest in high-risk projects. An increase in debt financing beyond a certain point increases the risk of bankruptcy and financial distress. An increase in debt financing increases the taxes that a company owes. Type here to searchExplanation / Answer
Incorrect:
3. A decreease in debt financing increases the risk...It should be A decreease in debt financing decreases the risk
5. An increase in debt financing increases the taxes..It should be An increase in debt financing decreases the taxes due to interest being tax deductible
The rest 1,2,4 are correct