An 8-K or Current Report May Be Helpful for a Comparable

question 3

Multiple Choice

An 8-K or current report may be helpful for a comparable companies analysis as it contains which of the following?

• A)Management discussion and analysis
• B)Pro forma adjustments
• C)Material corporate events or changes
• D)A comprehensive company overview

Apply the concept of break-even level of earnings before interest and taxes (EBIT) between different financing options.

Compute the annual interest tax shield.

Evaluate the effect of restructuring operations through debt issue on share repurchase and earnings per share.

Estimate the firm's value with and without leverage under given tax rates.

---

Definitions:

Liquidity

The ability of an asset to be converted into cash quickly without significantly affecting its price.

Solvency

The ability of a company to meet its long-term financial commitments and continue its operations.

Profitability

The ability of a company to generate earnings as compared to its expenses and other relevant costs incurred during a specific period.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to fund its operations and growth.