The lower the firm's tax rate, the larger is the incentive to use preferred stock instead of bonds.
Answer the following statement true (T) or false (F)
True
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Which of the following is NOT one of the factors that constitute trust?
A. Dependability B. Honesty C. Spontaneity D. Likability E. Competence
Work Room Company purchased equipment for $45,000. Total depreciation of $36,000 was recorded. On January 1, 2019, Work Room exchanged the equipment for new equipment, paying $65,000 cash. The market value of the new equipment is $65,000. Prepare the journal entry to record this transaction. Assume the exchange had commercial substance. Omit explanation.
What will be an ideal response?
Assume that Zonk is a potential leveraged buyout candidate. Assume that the buyer intends to put in place a capital structure that has 70 percent debt with a pre tax borrowing cost of 14 percent and 30 percent common equity. Compute the weighted average cost of capital for Zonk based on the new capital structure
a. 8.85% b. 12.56% c. 13.01% d. 9.94%
According to the ________ hypothesis, new retailing forms often begin as low-margin, low-price, low-status operations to challenge established retailers; then become successful; and eventually take the place of the established retailers they had
challenged. A) agent B) broker C) wheel-of-retailing D) warehousing E) retail life cycle