Question 5 Read each of the followng statements and decide whether t is TRUE or

Question

Question 5 Read each of the followng statements and decide whether t is TRUE or FALSE Wnte down the number and then TRUE or FALSE next to it 51 To a comparl debt financing is cheaper than equty financing 52 Ordinary shareholders carry the smallest nsk when providing capital to a company 53 Financial nsk decreases as a company takes on debt finance 54 Introducing debt finance into a company's capital structure increases the cost of equity as t brings with it financial risk Companies with 55 a high gearing have lower financial nak

Explanation / Answer

5.1)

TRUE

5.2)

FALSE

5.3)

FALSE

Financial risk increaeses as a compnay takes on debt financing

5.4)

TRUE

cost of equity increases with increase in debt

5.5)

FALSE

Comapnies with high gearing ratio have higher financial risk.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.