Using the dividend valuation method, an analyst determines the value of Company A's stock to be
$10 and the value of Company B's stock to be $14. Based on this information, which of the following
statements is most accurate?
A) Company B's required rate of return is higher than Company A's required return.
B) Other things being equal, if Company A and Company B have the same firm value, Company
A may have more shares of stock outstanding than Company B.
C) Company B must be riskier than Company A, and risk requires a reward.
D) Other things being equal, if Company A and Company B have the same firm value, Company
B must have more debt, thus leveraging its returns for the benefit of shareholders.
B
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Answer the following statement true (T) or false (F)
A company expects a loss from uncollectible accounts equal to one-fourth of one percent of the sales on account during the year. If the sales on account amounted to $400,000, the estimated uncollectible accounts losses would be
a. $100; b. $400; c. $1,000; d. $4,000; e. $10,000
Which of the following is one of the five major factors identified by Robert Smith that refers to ads that contain different ideas or switch from one perspective to another?
A. artistic value B. flexibility C. synthesis D. relevance E. elaboration
List three ways in which using a standard cost system helps managers
What will be an ideal response