In general, issuing equity may not dilute the ownership of existing shareholders if ________
A) the value of new shares is equal to the value of debt
B) the new shares are sold at a fair price
C) the firm has no debt financing
D) the firm uses debt conservatively
Answer: B
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Under common law, which standard may a client sue an auditor for failure to demonstrate due care?
a. Negligence b. Gross Negligence c. Fraud d. All of the above.
The auditor is normally not permitted to divulge confidential information obtained from a client. Which of the following situations would be a violation of this standard?
a. To respond to the information request of a shareholder. b. To respond to a quality review request of the state board of accountancy. c. To initiate a complaint with the AICPA's ethics division. d. To ensure adequate disclosure in accordance with GAAP.
Gains and losses from the sale of plant assets should be classified as extraordinary on the income statement
Indicate whether the statement is true or false
A measuring device that identifies what is actually happening in the process being controlled is an assessor
Indicate whether the statement is true or false