If a firm increases the proportions of debt and preferred stock that are contained in its capital structure, its _____.
A. financial risk will increase
B. business risk will decrease
C. tax liability will increase
D. operating leverage will decrease
E. financial leverage will decrease
Answer: A
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Accounts Receivable Turnover measures
A) how frequently during the year the accounts receivable are converted to cash B) the number of days outstanding C) the fair market value of accounts receivable D) the efficiency of the accounts payable function
Dan, a widower, dies intestate. He leaves two surviving children, Joe and Carrie, and two grandchildren who are children of his deceased daughter, Debra. If Joe and Carrie each take one-third of his estate and the grandchildren each take one-sixth of the estate, this is described legally by the statement that:
a. lineal descendants of predeceased children take property per stirpes. b. lineal descendants take the property per capita. c. collateral heirs take the property per stirpes. d. lineal descendants and collateral heirs take the property per capita.
Which of the following is true with respect to a defective formation of a limited partnership?
A) The formation is defective if the certificate filed does not substantially meet statutory requirements. B) It jeopardizes the limited liability of a limited partner. C) The 1985 RULPA reduces the risk of a limited partner for defective formation. D) All of these are correct.