Assignment:
Q1. Why is the following statement true? “Other things being the same, firms with relatively stable sales are able to carry relatively high debt ratios.”
Q2. Why do public utility companies usually have capital structures that are different from those of retail firms?
Q3. Why is EBIT generally considered to be independent of financial leverage? Why might EBIT actually be influenced by financial leverage at high debt levels?
Q4. If a firm went from zero debt to successively higher levels of debt, why would you expect its stock price to first rise, then hit a peak, and then begin to decline?
Your answer must be, typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides, APA format and also include references.