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choli [55]
3 years ago
15

A key underlying assumption of MM Proposition I without taxes is that: corporations are all-equity financed. individuals can bor

row at lower rates than corporations. individuals and corporations borrow at the same rate. financial leverage increases risk. managers always act to maximize the value of the firm. True or false?
Business
1 answer:
MrRa [10]3 years ago
5 0

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.

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Answer:

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Total debt  (not including mortgage) = $12,240

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Robert's debt-to-equity ratio:

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In 2006 Hewlett-Packard repurchased shares of common stock worth $5,241 million and made dividend payments of $894 million. Othe
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Answer:

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Explanation:

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-$6,077 = $0 -$5,241 -$894 + X + $196

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Drea is facing an ethical dilemma and is unsure how to proceed because there seems to be no “right” answer for everyone. Her bus
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Since Drea is facing an ethical dilemma and she wants to have the best option to her ethical dilemma, for the second step, she wouls have to: Identify feasible options. Option b.

<h3>What is an ethical dilemma?</h3>

In philosophy, ethical dilemmas—also known as ethical paradoxes or moral dilemmas—arise when an agent must choose between two competing moral obligations, none of which takes precedence. A definition that is similarly comparable describes ethical situations as ones where there is no right decision to be made.

An ethical problem, also known as a moral problem or ethical paradox, arises when a person must choose between two possibilities, none of which are wholly ethically acceptable.

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A petty cash fund of $500 is established on October 1. The entry to record the transaction is debit Petty Cash, credit Cash. deb
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The correct option is A) debit Petty Cash, credit Cash.

A petty cash fund of $500 is established on October 1. The entry to record the transaction is "debit Petty Cash, credit cash."

<h3>What is petty cash fund?</h3>

The petty cash fund would be a small sum of company money that is frequently kept on hand (for example, in a secured drawer or box) to cover unimportant or trivial expenses like office supplies or worker reimbursements.

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  • Petty cash funds feature drawbacks like their susceptibility to theft and abuse and the requirement to regularly check and balance them.

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The correct question is -

A petty cash fund of $500 is established on October 1. The entry to record the transaction is

A) debit petty cash, credit cash.

B) debit cash, credit petty cash.

C) debit Petty cash expense, credit cash.

D) debit retained earnings, credit petty cash.

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