Information asymmetry is chief among violations of which of the assumptions of an ideal capital market?
a. Capital Markets are frictionless
b. Homogeneous expectations
c. Atomistic competition
d. The firm has a fixed investment program
e. Once chosen, the firm's financing is fixed
B
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Joe Klein is an analyst for an investment banking firm that offers both underwriting and brokerage services. Joe sends you a highly favorable report on a stock that his firm recently helped go public and for which it currently makes the market. What are the potential advantages and disadvantages in relying on Joe's report in deciding whether to buy the stock?
The Supreme Court has ruled that union shop agreements:
A. are prohibited in all states. B. can only be enforced as agency shop agreements. C. can compel or force employees to join unions. D. are the only legal union security clause allowed in a union contract.
Flemco has made a series of transfers between bank accounts near year-end, some through inter-bank wired transfers and some through checks. You have audited the wired transfers and agree that they have been properly stated and now have the following schedule of transfers between cash accounts made using checks. You may assume that dates per bank are correct, and that dates per books are the dates the transactions were recorded in the books. Bank accounts Datedisbursedper:Datedepositedper:ChecknumberFromToAmount?BooksBankBooksBank40401st Nat.Suburban$112,000 12/311/51/31/33270ValleyMidburg62,500 12/311/312/3112/3140411st Nat.Capital121,000 1/21/412/311/33271ValleySuburban16,500 1/31/51/312/300700MidburgSuburban15,800 12/301/512/301/3 Analyze each of the above transfers and
determine whether you believe each causes total cash to most likely be correct, overstated, or understated as of year-end.Question #Check numberAs a result of the transfer, total cash at December 31 appears to be14040?23270?34041?43271?5700? What will be an ideal response?
What three difficulties does dollar-value LIFO overcome compared to applying simple LIFO?
What will be an ideal response?