On a common size balance sheet, total assets are equal to 100%
Indicate whether this statement is true or false.
Answer: TRUE
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Which of the following factors influence the risk of material misstatement?
a. The business risks. b. Management incentives. c. IT risks. d. All of the above.
Breakeven analysis helps in finding the level of activity at which sales revenue equals the sum of all variable and fixed costs
Indicate whether the statement is true or false
The following selected transactions took place during the current year for a company: Feb 25Declared a $2.50 per share cash dividend on 20,000 shares of common stock outstandingMar. 20Paid the cash dividends declared on Feb. 25.Dec 31Closed the $72,000 credit balance in Income Summary that reflects net income to Retained Earnings.(a) Prepare the journal entries for these transactions.(b) If Retained Earnings had a $155,000 credit balance on January 1, calculate its year-end balance as of December 31.
What will be an ideal response?
Simpson Inc. is considering a vertical merger with The Lachey Company. Simpson currently has a required return of 9%, while Lachey's required return is 14%. The market risk premium is 5.10% and the risk-free rate is 5%. Assume the market is in equilibrium. If Simpson is going to make up 67% of the new firm (and Lachey will comprise the remaining 33%), what will be the beta of the new merged firm? There will be no additional infusion of debt in the merger. Do not round your intermediate calculations.
A. 1.05 B. 1.38 C. 1.11 D. 0.83 E. 1.16