Answer:
I believe that it is A and C
Explanation:
Answer:
the correct answer is
c. Whether the gift was reasonable in the circumstances.
good luck ❤
Answer:
A and B
Explanation:
A) income statement
insurance expense-understand net income-overstated
B) balance sheet
prepaid insurance -overstated stockholders equity -overstated
Answer:
$57.69 per share
Explanation:
The computation of the stock price per share immediately after issuing the debt but prior to the repurchase is shown below
Price per share = Value of equity ÷ number of Shares
where,
Value of equity is
= Value of operations + T-bills value - Debt value
= $576,923 + $259,615 - $259,615
= $576,923
And, the number of shares is 10,000 shares
So, the price per share is
= $576,923 ÷ 10,000 shares
= $57.69 per share
We simply applied the above formula
Answer:
<u>decreases</u>
Explanation:
As per modigliani- miller approach, the value of a firm is not dependent upon the choice of capital structure of the firm.
Capital structure refers to the the blend or mix of different sources of capital a firm avails to raise funds. Such as debt and equity.
As per MM proposition 2, the expected yield of a stock is equal to equity capitalization rate plus an additional compensation for risk assumed by employment of debt in the capital structure due to which the debt-equity ratio rises.
As proportion of debt is increased in the capital structure, the earnings available to stockholders rise but this rise is offset by the rise in the expectation of shareholders which offsets the effect and thus value of firm remains the same.
Return on equity is given by
Thus, as the return on equity increases , the amount of equity in capital structure decreases as this net income rises owing to employment of more and more debt in the capital structure.