The Pecking Order Hypothesis suggests that profitable companies will borrow less (because they have more internal funds available) and may have higher debt-equity ratios because they have more debt capacity
Indicate whether the statement is true or false.
Answer: FALSE
Explanation: The Pecking Order Hypothesis suggests that profitable companies will borrow less (because they have more internal funds available) and may have LOWER debt-equity ratios—the mix of debt and equity borrowing ratio—because they have more debt capacity.
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Indicate whether this statement is true or false.
Developing financial arrangements such as commissions and higher margins is a way to resolve channel conflicts
Indicate whether the statement is true or false
On November 1, 2018, Downtown Jewelers accepted a 3-month, 15% note for $6,000 in settlement of an overdue account receivable. The accounting period ends on December 31. Prepare the journal entry to record the accrued interest at the year end. Omit explanation.
What will be an ideal response?
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