The basic format of an income statement is A) Assets – Liabilities = Profits. B) Income – Expenses = EBIT. C) Sales – Liabilities = Profits. D) Sales – Expenses = Profits. ANSWER D
Date: September 19th, 2020
Giving the company’s CEO stock options as part of his or her compensation package is an example of an agency cost. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Earnings available to common shareholders represents income that may be reinvested in the firm or distributed to its owners. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Each purchase occurring in the secondary markets increases the total stock of financial assets that exist in the economy. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
A seasoned equity offering is the sale of additional shares by a company whose shares are already publicly traded. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
Net profit margin is equal to the gross profit margin times the operating profit margin. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Earnings available to common shareholders is equal to a corporation’s positive net cash flow over a given period, typically one year. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
The money market includes transactions in short-term financial instruments. Indicate whether the statement is true or false ANSWER TRUE
Date: September 19th, 2020
The risk-return trade-off implies that the return on a riskless asset must be zero. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
Cash flows and profits are synonymous; in other words, higher cash flows equal higher profits. Indicate whether the statement is true or false ANSWER FALSE
Date: September 19th, 2020
