Although James does not want to be the doorman at his club’s annual dinner, he feels that he has to do that task because Leon, the club’s president, has instructed him to do so. Which kind of power has Leon used to have James enact the role of doorman?
A. referent power
B. coercive power
C. legitimate power
D. expert power
C. legitimate power
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Which ratio would you use to examine a company's ability to pay its debts in the short term?
A. Return on equity B. Earnings per share C. Acid-test ratio D. Debt to assets ratio
A multistep income statement shows sales revenue, cost of goods sold, and gross margin.
Answer the following statement true (T) or false (F)
The Truth-in-Lending Act:
A) applies only to such lenders as banks and savings and loans. B) protects individuals who receive loans for more than $25,000, except for home mortgage loans. C) is regulated by the FTC and the Federal Reserve Board under Regulation Z. D) allows a buyer who is financing his home with a first mortgage to rescind that transaction within three days.
Spectronix Inc operates in a world of perfect capital markets, has no debt, and has a required rate of return on equity of 10%
An executive manager has suggested that borrowing money to buy back outstanding stock is a good idea because it would replace equity financing with less expensive debt financing, thus increasing the value of the firm. Assume the firm issues new debt with a required return of of 5% to repurchase 30% of the outstanding stock. What is the cost of equity at the conclusion of this transaction? A) 21.67% B) 12.14% C) 16.43% D) 45.00%