Which of the following events would not improve (increase) a company’s return on equity? (Assume all else remains the same.) a. Retirement of long-term debt with cash b. Sale of common stock for cash c. Reduction in operating expenses Select one: b a and b a and c None of the events would improve a company’s return on equity. a c b and c plzz explain properly

Which of the following events would not improve (increase) a company’s return on equity? (Assume all else remains the same.) a. Retirement of long-term debt with cash b. Sale of common stock for cash c. Reduction in operating expenses Select one: b a and b a and c None of the events would improve a company’s return on equity. a c b and c plzz explain properly

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter9: Metric-analysis Of Financial Statements

Section: Chapter Questions

Problem 12CDQ

See similar textbooks

Similar questions

d. (1) What are the two primary ways companies raise common equity? (2) Why is there a cost associated with reinvested earnings? (3) Jana doesnt plan to issue new shares of common stock. Using the CAPM approach, what is Janas estimated cost of equity?
What is the impact of decrease in assets or increase in liabilities resulting in decreases in equity, other than distributions to equity holders on the profit of the company? a.None of the options b.The profit of the company declines c.The profit of the company remains d.The profit of the company inclines
Which of the following actions will have the result of increasing financial leverage in the firm? In each case, assume that all other activity in the firm does not change. Select one: a. A new equity issue b. A shift of $100 from cash to inventory c. A 2 for 1 stock split d. A new debt issue e. An increase in the firm’s retained earnings account
According to the accounting equation, all other things unchanged, which of the following could offset an increase in profits so as to keep the accounting equation balanced? A) Dividends, common shares, or liabilities decrease; alternatively, assets increase. B) Dividends or assets increase; alternatively, common shares or liabilities decrease. C) Dividends, assets, or common shares increase; alternatively, liabilities decrease. D) Dividends, assets, or liabilities increase; alternatively, common shares decrease
Revaluation surplus of a company will be shown in a. Statement of cash flows b. iIt will be shown only in current liabilities c. It will not be shown anywhere d. Statement of changes in equity Which of the following effect is Correct for the payment of dividend by the company on Irredeemable preference shares? a. Increase Bank balance b. Increase Current liability c. Decrease Current liability d. Increase Retained earnings
One major component of Equity is Contributed Capital. What does Contributed Capital represent? Group of answer choices If the company took all of their assets and paid off all of their liabilities, this is what would be remaining. This represents the amount of cash currently in the company that belongs to the owners. This represents the value of what the owners put into the company, when they put it in. This represents all of the profits (minus all of the losses), minus dividends paid out to owners, that have been kept in the company. This represents the amounts the company owes to the owners, plus whatever interest rate they agreed to pay.
What does it mean when a company has zero net income but its stock price has increased? How do you recognize the change under the equity method?
Which of the following is NOT a conclusion drawn from M&M's Propositions 1 and 2? a. Shareholder's required return rises with leverage. b. The WACC does not change as capital structure change. c. Firm value is determined by the left hand of the balance sheet the firm's assets, and the cash flow generated by them. d. The WACC is determined by the riskiness of the company's business (assets). e. A firm can change its market value by splitting its cash flows into different streams.
If a firm records positive net income for the year and also pays a cash dividend then: Multiple Choice The balance sheet equation must increase Retained earnings must decrease Retained earnings must increase None of these Please avoid solutions in an image format thank you The balance sheet equation must decrease
Which of the following statements is true? a. High liquidity means a company is short on cash and may be unable to pay its debts.b. When a company decides to go public through an IPO, it is typically targeting to sell its shares to only a handful of shareholders. c. If the company has a higher than expected extremely high profit this year, equity holders will benefit more than debt holders as debtholders are the residual claimers for the cash flows of the company.d. In the extreme case, the debt holders take legal ownership of the firm's assets through a process called bankruptcy.e. Equity holders expect to receive dividends and the firm is always legally obligated to pay them.
What would be the impact on the accounting equation when a company acquires treasury stock? Increase assets and increase stockholders' equity. Decrease assets and decrease stockholders' equity. Decrease assets and increase stockholders' equity. No effect on the accounting equation.
The quality of earnings concept indicates thata. stockholders want the corporation to earn enough income to be able to pay its debts.b. net income is the best measure of the results of operations.c. continuing operations and one-time transactions are of equal importance.d. income from continuing operations is a more relevant predictor of future performancethan income from one-time transactions