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    Casino industry or a firm in another industry

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    Firm management is said to consider a number of factors when deciding its capital structure. These include:

    * The degree of operating risk

    * The availability of tax shelters provided by things other than debt, such as accelerated depreciation, investment tax credits and operating tax-loss carry-forwards.

    * The ability of assets to support borrowing.

    * Management's attitude toward the risk created by financial leverage

    * Industry and Market Dynamics

    For casino industry or a firm in another industry, discuss these variables and how they would influence management's assessment of the suitability of financial leverage for the firm.

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    Solution Preview

    For a firm competing in the casino industry, capital structure decision is as important as any other firm in other industries. Hence, a casino firm has to consider several factors. For example, industry and ...

    Solution Summary

    The expert determines the degree of operating risk for Casino industry or a firm in another industry.