#Sales Offer!| Get upto 25% Off:

Question 1 (30 marks)
a) Define and distinguish the following: (10 marks)
i. Gearing ratio and asset protection ratio
ii. Financial distress and insolvency
iii. Acquisition and a takeover
iv. Liquidation and reorganizational of a company
v. Proxy contest and going private
b) Using the balance sheet of a firm, explain the difference between valuation and financing. (5 marks)
c) Differentiate between the static tradeoff and the pecking order hypothesis of capital structure. In each case, list he basic assumptions. (6 marks)
d)  new player in the telecommunication industry offering resale services. The company is fully financed by its shareholders. It expects to generate Kshs. 500, 000 in earnings before interest and taxes (EBIT) in perpetuity. The corporate tax rate is 25% and all earnings after tax are to be paid out s dividends. The shareholders have approved for a capital restructuring to allow Kshs. 1, 000, 000 of debt, payable at 25% interest rate. The cost of equity capital of companies in the same industry is 20%.
i. What is the value of the unlevered firm? (2 marks)
ii. What will be the new value of the company after restructuring? (7 marks)

For a custom-written paper on the above topic, place your order now!

What We Offer
• On-time delivery guarantee
• PhD-level professionals
• Automatic plagiarism check
• 100% money-back guarantee
• 100% Privacy and Confidentiality
• High Quality custom-written papers


Found something interesting ?

• On-time delivery guarantee
• PhD-level professional writers
• Free Plagiarism Report

• 100% money-back guarantee
• Absolute Privacy & Confidentiality
• High Quality custom-written papers

Related Model Questions

Feel free to peruse our college and university model questions. If any our our assignment tasks interests you, click to place your order. Every paper is written by our professional essay writers from scratch to avoid plagiarism. We guarantee highest quality of work besides delivering your paper on time.

Grab your Discount!

25% Coupon Code: SAVE25
get 25% !!