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3. Loss of Future Financing Flexibility: Greater the uncertainty about future financing needs -- > Higher Cost

Overall, if the marginal benefits of borrowing exceed the marginal costs, the firm should borrow money. Otherwise, it should use equity.

Overall, if the marginal benefits of borrowing exceed the marginal costs, the firm should borrow money. Otherwise, it should use equity.

What do firms consider when they make capital structure decisions? To answer this question, Pinegar and Wilbricht surveyed financial managers at 176 firms in the United States. They concluded that the financial principles listed in Table 7.4 determine capital structure decisions, in the order of importance in which they were given.

Table 7.4: Financial Principles Determining Capital Structure Decisions

Planning Principle by Order of Importance

Unimportant

Retirement Planning For The Golden Years

Retirement Planning For The Golden Years

If mutual funds seem boring to you, there are other higher risk investment opportunities in the form of stocks. I seriously recommend studying the market carefully and completely before making the leap into stock trading but this can be quite the short-term quick profit rush that you are looking for if you am willing to risk your retirement investment for the sake of increasing your net worth. If you do choose to invest in the stock market please take the time to learn the proper procedures, the risks, and the process before diving in. If you have a financial planner and you definitely should then he or she may prove to be an exceptional resource when it comes to the practice of 'playing' the stock market.

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