Other things held constant, which of the following statements is correct if a firm currently is operating at its financial breakeven point?
a. EBIT must be greater than zero.
b. EBIT would equal zero if the firm is financed only with common stock (i.e., there is no debt or preferred stock).
c. EBIT would equal zero, hence EPS would be less than zero, if the firm has preferred stock but no debt.
d. EPS would equal zero only if the firm is financed with some amount of debt.
e. The firm would not be considered to have much financial risk, especially when compared to a firm that operates well above its financial breakeven point.
b
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On March 1, 2016, Bema Inc. issued 600 shares of its publicly traded stock as compensation to its employee, Ms. McPhee. On date of issuance, the stock's fair market value was $12,000. Under the terms of her employment contract, Ms. McPhee couldn't dispose of the stock before July 1, 2019, and if she terminated her employment with Bema before that date, she had to forfeit the stock back to Bema. Ms. McPhee made a timely election in 2016 to accelerate income recognition with respect to the 600 shares of restricted stock. On July 1, 2019, Ms. McPhee, who was still employed by Bema, sold all 600 shares for $26,000. What are the 2019 tax consequences to Ms. McPhee?
A. She recognizes $12,000 ordinary income and $14,000 capital gain in sale of the stock. B. She recognizes zero ordinary income and $26,000 capital gain on sale of the stock. C. She recognizes $26,000 ordinary income and zero capital gain on sale of the stock. D. She recognizes zero ordinary income and $14,000 capital gain on sale of the stock.
One way to slow the pace of your speech is to______.
a. repeat yourself b. pause c. talk very slow d. start late
A "customer centered" approach to handling the media by a public relations manager means that the PR person
a. must persuade journalists that it is in their interest to run a particular story b. determines the needs and wants of the journalist and modifies the story to meet those needs c. must combat journalists rejecting a story because they just don't understand the value d. go over the head of the journalists to the editor to convince the media outlet to run the story e. tell the journalists that he or she has many years of experience and that should be good enough to know whether the story is newsworthy or not
Return on equity increases when the expected rate of return from the acquired assets is ________than the rate of interest on the bonds used to finance the asset acquisition.
What will be an ideal response?