Explore BrainMass

Explore BrainMass

    Equity and Debt financing: choice, interest rate changes, risk concepts,

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. If a firm has issued bonds to help finance the company's expansion, why would market interest rate changes continue to be a concern for the company after the sale of bonds?

    2. If you had your choice, would you choose equity or debt to finance your company's capital requirements? Defend your choice and include risk concepts.

    3. Why is a high break-even point a risk for a company?

    © BrainMass Inc. brainmass.com March 4, 2021, 5:37 pm ad1c9bdddf
    https://brainmass.com/business/interest-rates/equity-debt-financing-example-problem-3257

    Solution Preview

    1. If a firm has issued bonds to help finance the company's expansion, why would market interest rate changes continue to be a concern for the company after the sale of bonds?

    Bonds are a kind of passive for a company. No matter is sold, the interest rate are paid by company and is, as a consequence, a source of change on the Financial Statement of enterprise.

    On the other hand, the interest ...

    Solution Summary

    The solution answers each question in two or three sentences which are clear and easily understandable.

    $2.49

    ADVERTISEMENT