With its current financial policies, Flagstaff Inc. will have to issue new common stock to fund its capital budget. Since new stock has a higher cost than reinvested earnings, Flagstaff would like to avoid issuing new stock. Which of the following actions would REDUCE its need to issue new common stock?
A. Increase the percentage of debt in the target capital structure.
B. Increase the proposed capital budget.
C. Reduce the amount of short-term bank debt in order to increase the current ratio.
D. Reduce the percentage of debt in the target capital structure.
E. Increase the dividend payout ratio for the upcoming year.
Answer: A
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A firm gains bargaining power with a supplier when the firm has many competitors.
Answer the following statement true (T) or false (F)
Of the eight factors usually considered when valuing the venture, provide four of them along with a sentence of explanation for each factor you provide.
What will be an ideal response?
Spafford Services, Inc. provides services to clients. On May 1, a client prepaid Spafford Services $30,000 for 6-months services in advance. Spafford Services' general journal entry to record this transaction will include a:
A. Debit to Unearned Management Fees for $30,000. B. Credit to Unearned Management Fees for $30,000. C. Credit to Management Fees Earned for $30,000. D. Credit to Cash for $30,000. E. Debit to Management Fees Earned for $30,000.
The CEO of a software company has a meeting with the product design team to discuss a new software that the company is planning to develop. During the meeting, the CEO discards a few suggestions as executing them would be a costly affair for the company. Given the scenario, the company is most likely in the _____ stage of the new product development process.
A. idea generation B. testing C. analysis D. idea screening