CHAPTER 14 - CAPITAL STRUCTURE Flashcards
1
Q
A company with no debit is called ?
A
unlevered company
2
Q
A company which has debt is called
A
Levered
3
Q
ROE returns on equity
A
net income after tax and interest. EBIT-TAX-INCOME / total equity
4
Q
Increasing leverage (means taking debt)
A
Increases ROE and EPS. Increases risk to shareholders and makes share more volatile
4
Q
EPS earnings per share
A
net income after tax and interest / total number of shares
