Answer the following statement(s) true (T) or false (F)
Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public.
ANSWER: False
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Why would a retailer measure direct product profitability (DPP)?
A) because DPP is highly correlated with the gross margin on a product B) because handling expenses are negligible compared with gross margin C) because handling costs can make products less profitable D) because gross margin on a product is too difficult to measure accurately E) because DPP removes the impact of paperwork expenses
Answer the following statements true (T) or false (F)
1. In a limited liability partnership, each partner is not personally liable for the malpractice or negligence committed by another partner. 2. The income of a limited liability company cannot be taxed to the members as though they were partners. 3. An S corporation is a corporation with 100 or fewer stockholders that can elect to be taxed as a partnership. 4. If elected, an S corporation pays no corporate income tax.
A bond issued by Liberty, Inc. 10 years ago has a coupon rate of 8% and a face value of $1,000. The
bond will mature in 15 years. What is the value to an investor with a required return of 12.5%? A) $658.94 B) $750.86 C) $800 D) $701.52
The major advantage provided by the profitability index is it:
A) eliminates the need to estimate the firm's cost of capital. B) reduces the forecast error of cash flow estimates. C) provides a better measure of the effects of a project on shareholder wealth than NPV. D) is useful as an aid in raking projects from best to worst. E) is easier to calculate than NPV.