When a firm has risky debt, its equity can be viewed as an option on the total value of the firm with an exercise price equal to the face value of the debt.
Answer the following statement true (T) or false (F)
True
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A value-adding activity is one that increases the cost of a product but does not add to the product's market value
Indicate whether the statement is true or false
A firm purchased $35,000 worth of investments classified as securities available for sale. At the end of the year, the investments were worth $23,000 . What is the correct presentation of these events in the statement of cash flows prepared under the direct method?
a. Investing cash outflow, $35,000 b. Add $23,000 in reconciliation of earnings and net operating cash flow c. Investing cash outflow, $35,000; subtract $12,000 in reconciliation of earnings and net operating cash flow d. No disclosure is needed.
A study of 1456 nonprofit board CEOs reveals that board governance practices are directly influenced by ______.
a. the background of the CEO *b. the gender and racial diversity of the board c. the return on investment anticipated by implementing certain initiatives d. the political conservatism of the board
Banks must return physical copies of the maker's canceled checks
Indicate whether the statement is true or false