Under the statutes in most states, if Heather and Gabriel form a corporation with Heather as president and Gabriel as treasurer, Heather cannot also be corporate secretary
Indicate whether the statement is true or false
True
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If a lease is structured so that the lessee pays a set rental payment each period plus an additional amount based upon usage or a change in an index, these contingent rental payments should be expensed when the contingency is likely to be met
Indicate whether the statement is true or false
Solid Structures, Inc., a manufacturer of steel wire reinforcements and pre-stressed concrete strands for the concrete construction industry, wants to determine its WACC. Today, 1/1/2018, the firm issued 7,000 bonds that will mature in 1/1/2038 with $1,000 face value. These bonds will pay a 9% coupon rate semiannually and are currently selling for $950. The firm has 100,000 preferred shares of stock outstanding with a book value of $40, but currently selling for $50 per share. The most recent preferred and common dividends were $3.50 and $2.50 per share, respectively. The firm’s EPS five years ago was $8.00 and it expects to increase its next dividend payment by the implied 5-year earnings per share growth rate. Flotation costs on debt and preferred equity are both 3%, but 7% in the
case of common stocks. The common stock is selling today for $25 and the firm’s tax rate and payout ratio are 40% and 25%, respectively. The firm has 200,000 shares of common stock outstanding with the same book value as that of its preferred stock. a) Calculate the book value and market value weights for each source of capital. b) Calculate the component costs of capital (i.e., debt, preferred equity, retained earnings, and new common equity). c) Determine the weighted average costs of capital using both the market and the book value weights.
Permanent accounts:
A. are Balance Sheet accounts. B. have their balances zeroed-out at the end of each accounting year. C. do not have their year-end balances carried into the next year. D. are not permitted under GAAP.
In the stilted language of auto policies, the "second party" in an accident is
A) you. B) the driver of the other car. C) the passenger in your car. D) your insurer.