Which of the following is not an advantage of issuing long-term debt?
A) The stockholders do not relinquish any control.
B) The interest is tax-deductible.
C) The risk of becoming bankrupt is reduced.
D) Increased earnings accrue to the stockholders.
C
You might also like to view...
What helps us to express grief, happiness, and other feelings in culturally acceptable ways?
A. feelings B. relationships C. talking D. inclusion
In a market pricing relationship, people see each other as interchangeable because the deal is more important than the relationship.
Answer the following statement true (T) or false (F)
American Generation Ecology (AGE) expects to grow at a constant rate of 4 percent forever. Its target debt/asset ratio is 60 percent and it expects to have profitable investments of $300,000 this year. AGE plans to continue paying the same dividend that has been paid the past 20 years, $1.50 per share, long into the future. The firm has 400,000 shares of stock outstanding. If net income is expected to be $800,000, what should be AGE's dividend payout ratio this year?
A. 15.4% B. 25.0% C. 75.0% D. 46.2% E. 60.0%
A wealthy woman just died and left her pet cats the following estate: $50,000 per year for the next 15 years with the first cash flow today. At a discount rate of 3.2%, what is the feline estate worth in today's dollars?
A) $588,352.84 B) $607,180.14 C) $750,000.00 D) $774,000.00