A firm's cost of external equity capital (cost of issuing new stock) is equal to the rate of return that stockholders demand (require) to invest in the firm's outstanding common stock.
Answer the following statement true (T) or false (F)
False
The cost of external equity capital is similar to the cost of retained earnings except it is higher because the firm incurs flotation costs when it issues new common stock. See 11-1: Component Costs of Capital
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The process of developing an organization's corporate social responsibility program begins when a firm incorporates a focus on fulfilling the economic, legal, ethical and philanthropic dimensions into its
A. marketing strategy. B. advertising strategy. C. vision statement. D. mission statement. E. business plan.
Which of the following individuals should sign the management representation letter?
a. The members of the audit committee and board of directors. b. The chief executive officer and the chief financial officer. c. The chief financial officer and the treasurer. d. The controller and the auditor.
Geoff Parker, the sole stockholder of Parker Tax Services, started the business by investing $10,000 cash and a building worth $20,000. Identify the general journal entry below that Parker Tax Services will make to record the transaction.
A.
| Common Stock | 30,000 | |
| Cash | 10,000 | |
| Building | 20,000 |
B.
| Cash | 10,000 | |
| Common Stock | 30,000 |
C.
| Dividends | 30,000 | |
| Common Stock | 30,000 |
D.
| Notes Payable | 30,000 | |
| Common Stock | 30,000 |
E.
| Cash | 10,000 | |
| Building | 20,000 | |
| Common Stock | 30,000 |
The long-term objectives of a company need not include statements concerning pricing policy
Indicate whether the statement is true or false