Answer:
C. Individuals and corporations borrow at the same rate.
Revised Question:
A key underlying assumption of MM Proposition I without taxes is that:
A. financial leverage increases risk.
B. individuals can borrow at lower rates than corporations.
C. individuals and corporations borrow at the same rate.
D. managers always act to maximize the value of the firm.
E. corporations are all-equity financed.
Explanation:
Modigilani-Miller gave theories about the optimal capital structure of the firms. They proposed thier theories under <em>taxes and and without taxes</em> economies. They gave two propositions under each economy.
MM proposition I without taxes states that value of of firm with equity finance and value of a firm with debt finance are equal. So the capital structure of a firm is irrelevant in decision making.
The underlying assumption of the proposition is:
Presence of asymmetric information due to which, investor's and firm's cost of borrowing money is same.
Answer:
Debit Credit
Aug 4 Cleaning Supplies 79
Accounts payable 79
(Innovation Supplies)
Aug 19 Office Equipment 4900
Accounts Payable 4900
(Office Warehouse)
Aug 23 Cleaning Supplies 209
Accounts Payable 209
( Rubble Supplies)
Explanation:
Answer:
C. $13,100U.
Explanation:
The cost variance is given by the difference between the actual cost of commissions and the projected cost of commissions of 30,000 units at $8 each:
Since the actual cost is higher than the anticipated cost, the balance is unfavorable.
Gridiron would report a cost variance of: C. $13,100U.
Answer:
To know what things they should buy and how much they should pay
Explanation:
