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sattari [20]
3 years ago
11

Funds acquired by the firm through retaining earnings have no cost because there are no dividend or interest payments associated

with them, and no flotation costs are required to raise them, but capital raised by selling new stock or bonds does have a cost. True False
Business
2 answers:
kow [346]3 years ago
8 0

Answer:

False

Explanation:

Retained earnings have no flotation costs, but have opportunity costs. For example, if companies distribute the earnings to shareholders, shareholders can invest the funds in alternative sources for returns.

fenix001 [56]3 years ago
4 0

Answer:

False

Explanation:

Retained earnings as well as equity capital (raised through issuing stocks) have the same cost, and that is the required rate of return. Retained earnings must be treated as reinvested equity, since the alternative to retained earnings would be to distribute dividends to the stockholders.

Bonds usually have a lower cost and it is determined by the coupon rate and the corporate tax rate (interests paid lower taxes).

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Which of the following is most likely to be a primary data source:
love history [14]

Answer:

d. A customer survey

Explanation:

Data collected by researchers for the first time for a specific study is primary data.  A customer survey is a method of collecting primary data. A customer survey gathers information on the research topic directly from respondents.

Primary data like surveys are costly and consume time to collect, unlike secondary data. Other methods of collecting primary data include administering questionnaires, direct or indirect personal interviews, field observations, and experiments.

7 0
3 years ago
An accounting report that shows the changes in capital during the accounting period is a
never [62]
It is a statement of the owners equity. I hope this helps :)
8 0
3 years ago
Read 2 more answers
Which one of the following statements concerning net working capital is correct?
Luda [366]

Answer:

D

Explanation:

Net working assets is current assets less current liabilities

Current assets include cash, cash equivalents and inventory

Examples of current liabilities include accounts payables, short-term debt, accrued expenses, and dividends payable

When inventory is purchased with cash, inventory increases and cash reduces, thus there is no change in net working capital

Net working capital can be negative or positive.

If current assets is greater than current liabilities, it would be positive, if this is not the case, it would be negative.

7 0
2 years ago
A contingent liability is:Multiple ChoiceAlways of a specific amount.An obligation arising from the purchase of goods or service
Ainat [17]

Answer:

A potential obligation that depends on a future event arising from a past transaction or event

Explanation:

A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.

Contingent liability are usually recorded in the financial statements if :

A. The contingency is likely to occur

B. The amount can be estimated.

I hope my answer helps you

5 0
3 years ago
Joan, is a jewelry designer who had created a unique new jewelry piece called a neacklet. It can be either a necklace or a brace
patriot [66]

Answer and explanation:

In Joan's case, a general partnership will provide her control over her business that will be shared with the older gentleman who owns a jewelry store. Profits would be distributed evenly regardless of the contribution of each partner in the business. However, the older gentleman has offered Joan the chance of purchasing his share later on which would provide her the total control of the business and the patent of her creation.

The other option Joan has available is purchasing a franchise. This will allow Joan to avoid the initial costs of introducing her products to the market and the risks of not having enough consumers since her brand name is new. Though she will lose access to the patent of her creation and periodically Joan will need to pay NewJewelry a fee for using its name.

Therefore, <em>as Joan prefers to have control over her designs, it would be more convenient for her to choose the general partnership.</em>

6 0
3 years ago
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