Homework Answers
statement c is correct
in coorporation investors is suject to higher taxes because earnings of the coorporation will be taxed and dividends will also be taxed
coorporation will increases ways to raise capital and more regulations and there will be no personal liabilities
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Question 7 (1 point) Which of the following statements is correct? A) One disadvantage of forming...
Which of the following statements is correct? a. If a firm follows the residual dividend model,...
Which of the following statements is correct? a. If a firm follows the residual dividend model, then a sudden increase in the number of profitable projects would be likely to lead to a reduction of the firm's dividend payout ratio b. The clientele effect explains why so many firms change their dividend policies so often c. One advantage of adopting the residual dividend model is that this policy makes it easier for a corporation to attract a specific and well-identified...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it C. invests. Bondholders should...
Which of the following statements is the disadvantage of going public from the manager's point of...
Which of the following statements is the disadvantage of going public from the manager's point of view: Easier to access large capital with greater liquidity Investors are widely dispersed. Their voting share is diluted, thus making investors more difficult to monitor managers Short-term investors and short sellers will make the stock price volatile Less pressure from regulators
Question 5 (1 point) Which of the following statements is correct? OA) The use of debt...
Question 5 (1 point) Which of the following statements is correct? OA) The use of debt financing affects the probability of bankruptcy, and the firm's earnings, as well as the firm's stock price. B) The riskiness of projected earnings and cash flows to stockholders does not depend on how the firm is financed. C) Stock prices are dependent on projected total cash flows and the use of debt, but not on the timing of the cash flow stream. D) The...
Question text Which of the following statements about convertibles is most CORRECT? Select one: a. Investors...
Question text Which of the following statements about convertibles is most CORRECT? Select one: a. Investors are willing to accept a lower interest rate on a convertible than on otherwise similar straight debt because convertibles are less risky than straight debt. b. At the time it is issued, a convertible's conversion (or exercise) price is generally set equal to or below the underlying stock's price. c. The coupon interest rate on a firm's convertibles is generally set higher than the...
Question 10 (Mandatory) (1 point) Which of the following statements is true? If the new project...
Question 10 (Mandatory) (1 point) Which of the following statements is true? If the new project is riskier than the firm's existing projects, then it should be charged a higher cost of capital. O If the new project is riskier than the firm's existing projects, then it should be charged a lower cost of capital. If the new project is riskier than the firm's existing projects, then it should be charged the firm's cost of capital. The new project's risk...
Which of the following statements about activity based costing is not correct? Select one: a. A...
Which of the following statements about activity based costing is not correct? Select one: a. A disadvantage of activity based costing is the cost needed to implement the system b. Activity based costing is good to use when products differ in age. c. Activity based costing is efficient to implement when there is not a large difference in volumes of each product produced. d. An advantage of activity based costing is the increased accuracy in pricing.
acct hw QUESTION 1 The partnership form of business organization has tax advantage over sole proprietorship....
acct hw
QUESTION 1 The partnership form of business organization has tax advantage over sole proprietorship. combines the records of the business with the personal records of the owner. has tax advantage over corporation. is classified as a separate legal entity. QUESTION 3 Retained earnings is part of stockholders' equity is part of assets is part of liabilities is part of common stock QUESTION 4 A payment of a portion of an accounts payable will increase liabilities decrease stockholders' equity....
Which of the following statements concerning capital structure theory is NOT CORRECT? The major contribution of...
Which of the following statements concerning capital structure theory is NOT CORRECT? The major contribution of Miller's theory is that it demonstrates that personal taxes decrease the value of using corporate debt. Under MM with zero taxes, financial leverage has no effect on a firm's value. Under MM with corporate taxes, the value of a levered firm exceeds the value of the unlevered firm by the product of the tax rate times the market value dollar amount of debt. Under...
13. Which of the following statements is correct? a. Any forecast of financial requirements involves determining...
13. Which of the following statements is correct? a. Any forecast of financial requirements involves determining how much money the firm will need and is obtained by adding together increases in assets and spontaneous liabilities and subtracting operating income. b. The projected balance sheet method of forecasting financial needs requires only a forecast of the firm's balance sheet. Although a forecasted income statement helps clarify the financing needs, it is not essential to the balance sheet method. c. Because dividends...
Which of the following statements is CORRECT? a. Relative to sole proprietorships, corporations generally face fewer regulations, and they also find it easier to raise capital. Stockholders should generally be happier than bondholders to have managers invest in risky projects with high potential returns as opposed to safe projects with lower expected returns. There is no good reason to expect a firm's stockholders and bondholders to react differently to the types of assets in which it C. invests. Bondholders should...
Question 5 (1 point) Which of the following statements is correct? OA) The use of debt financing affects the probability of bankruptcy, and the firm's earnings, as well as the firm's stock price. B) The riskiness of projected earnings and cash flows to stockholders does not depend on how the firm is financed. C) Stock prices are dependent on projected total cash flows and the use of debt, but not on the timing of the cash flow stream. D) The...
Question 10 (Mandatory) (1 point) Which of the following statements is true? If the new project is riskier than the firm's existing projects, then it should be charged a higher cost of capital. O If the new project is riskier than the firm's existing projects, then it should be charged a lower cost of capital. If the new project is riskier than the firm's existing projects, then it should be charged the firm's cost of capital. The new project's risk...
acct hw
QUESTION 1 The partnership form of business organization has tax advantage over sole proprietorship. combines the records of the business with the personal records of the owner. has tax advantage over corporation. is classified as a separate legal entity. QUESTION 3 Retained earnings is part of stockholders' equity is part of assets is part of liabilities is part of common stock QUESTION 4 A payment of a portion of an accounts payable will increase liabilities decrease stockholders' equity....
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