What is meant by the "spread" with regards to financial leverage? What does the "spread" have to do with the issuance of bonds?
What will be an ideal response?
As with other forms of credit, bonds may provide companies increased earnings through financial leverage. If a company can borrow money at 7% through a bond issue
and invest the proceeds at 12%, the company's earnings benefit from the 5% (12% ? 7%) spread. Also, bond interest expense, like other forms of interest expense, is tax deductible, making the effective cost of borrowing less than the interest expense because the interest expense reduces the tax expense. Because dividend payments are not tax deductible, equity financing (e.g., issuing common stock) does not offer this advantage.
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Advocacy groups such as Consumers International and the Better Business Bureau can act on behalf of consumers and promote consumers' rights through ________ but not through ________
A) enforcing regulations; influencing the media B) influencing the media; political lobbying C) organizing boycotts; influencing the media D) political lobbying; enforcing regulations E) political lobbying; organizing boycotts
In reporting cash flows from investing activities on the statement of cash flows, the cash inflows are usually reported first, followed by the cash outflows
Indicate whether the statement is true or false
Your time and effort ____ greatly appreciated
A) is B) are C) was
The process capability index ______.
a. is a measure of how well a process meets its control limits b. is the ratio of the range of design tolerances to the range of the variability of the process c. is the product of the range of design tolerances to the range of the variability of the process d. is the reciprocal of the range of design tolerances to the range of the variability of the process