Since stockholders are able to reduce their exposure to risk by efficiently diversifying their holdings
of securities, there is no reason for individual firms to seek diversification of their holdings of
assets.
Indicate whether the statement is true or false
FALSE
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In U.S. GAAP, preferred stock subject to mandatory redemption is disclosed
a. between liabilities and shareholders' equity. b. as a liability. c. as a shareholders' equity. d. as a revenue. e. as an expense.
Identify each of the following as an (1 ) increase in owner's equity, or a (2 ) decrease in owner's equity. (a) Fees Earned (b) Wages Expense (c) Withdrawal (d) Lawn Care Revenue (e) Investment (f) Supplies Expense
Larry Bar opened a frame shop and completed these transactions:1. Larry started the shop by investing $41,500 cash and equipment valued at $19,500 in exchange for common stock. 2. Purchased $220 of office supplies on credit. 3. Paid $2700 cash for the receptionist's salary. 4. Sold a custom frame service and collected $6000 cash on the sale. 5. Completed framing services and billed the client $350. What was the balance of the cash account after these transactions were posted?
A. $45,150. B. $44,930. C. $10,930. D. $10,580. E. $44,800.
Investors ________ for estimating the WACC
A) are indifferent between using market and book value B) prefer book value to market value C) prefer market value to book value D) prefer a mix of book and market value