Discuss the uses and limits of ratio analysis and give


1. Discuss the uses and limits of ratio analysis and give three examples.

2. When securities are priced fairly, why would the original shareholders of a firm pay the present value of bankruptcy and financial distress costs?

3. What are the benefits and drawbacks of accumulating cash balances rather than paying dividends and what effects do dividend policy have on this type of decision?.

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Financial Management: Discuss the uses and limits of ratio analysis and give
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