If a corporation issues par value common stock and the proceeds are less than par value, the Common Stock account is credited for the par value
Indicate whether the statement is true or false
True
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This persuasive organizational pattern arranges information based upon pros and cons
A) Monroe's Motivated Sequence B) advantages-disadvantages C) cause-effect D) effect-cause
MIS is a tool that is most valuable when it leverages the talents of people who know how to use and manage it effectively.
Answer the following statement true (T) or false (F)
Financial leverage
a. may increase the return to the common shareholders. b. uses lower cost borrowed funds and earns a higher rate of return on those funds than their cost. c. requires the common shareholders to take on more risk in their investment. d. all of the above e. none of the above
To estimate the company's WACC, Marshall Inc. recently hired you as a consultant. You have obtained the following information. (1) The firm's noncallable bonds mature in 20 years, have an 8.00% annual coupon, a par value of $1,000, and a market price of $1,050.00. (2) The company's tax rate is 25%. (3) The risk-free rate is 4.50%, the market risk premium is 5.50%, and the stock's beta is 1.20. (4) The target capital structure consists of 35% debt and the balance is common equity. The firm uses the CAPM to estimate the cost of common stock, and it does not expect to issue any new shares. What is its WACC?
A. 7.48% B. 7.88% C. 8.29% D. 8.73% E. 9.19%