TRUE / FALSE 1. Both interest expense and dividends are tax deductible 2. The APR (or...

TRUE / FALSE

1. Both interest expense and dividends are tax deductible

2. The APR (or “nominal rate”) is always equal to the equivalent annual rate (EAR)

3. Companies often go public to raise capital for expansion

4. The three types of cash flows on the Statement of Cash Flows are operating, investing and financing.

5. Equity holders have unlimited upside, while bondholders can only get their coupon payments and face value of the bond as returns.

6. Both operating expenditures and capital expenditures are multi-year investments.

7. Net Present Value represents the present value of all cash flows from an investment, minus the initial outlays.

8. Liquid markets typically have large bid / ask spreads for trades.

9. Assuming interest rates are positive, the future value of $1 today will always be greater than $1

Expert Solution

1 answer) False
Explanation: The interest expense is paid on debt and treated as an allowable expense for tax purpose, and the dividends are paid from the retained earnings accounts and not treated tax-deductible

2 answer) False:
Explanation: The nominal interest rate is calculated based on simple interest and the equivalent annual rate is calculated on compounding concept

3 answer) True
Explanation: The companies registered with the stock exchange can issue their shares to the public to subscribe and capital generated from the stock issue is utilized on growth opportunities and capital investments

4 answer) True
Explanation: The cash flows shows the cash inflows and outflows during the period and classified into cash flow from operating activities, investing activities, and financing activities

5 answer) True

Explanation: the bond are classified as a liability in the balance sheet and paid interest and principal amount, but the equity holders are owners of the company and receive dividends without any limit

jeff jeffy answered 1 year ago

True/ False questions 1) Dividends paid to stockholders are tax deductible on a corporations income Statement....

True/ False questions 1) Dividends paid to stockholders are tax deductible on a corporations income Statement. 2) Common stock in a corporation can be privately owned by private investors or publicly owned by public investors. 3) the number of outstanding shares of common stock is always greater than or equal to the number of authorized shares of common stock 4) Typically small corporations are publicly owned large corporations are privately or closely owned.

Which of the following is/are tax-deductible expense(s) for a corporation? a. Dividends paid on the corporation’s...

Which of the following is/are tax-deductible expense(s) for a corporation? a. Dividends paid on the corporation’s stock b. Interest paid on the corporation’s bonds c. Both interest and dividends paid d. Neither interest nor dividends paid

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses...

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses , re-configure your taxes and net income : Subtract your deductible expenses from your gross income to determine your Gross Income (AGI ). Then recalculate your taxes based on the AGI. 3. Subtract your taxes from your Gross Income to determine your updated net income . Please use formulas for your calculations Tax calculations should be listed for each type of tax there is...

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses...

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses , re-configure your taxes and net income : Subtract your deductible expenses from your gross income to determine your Gross Income (AGI ). Then recalculate your taxes based on the AGI. 3. Subtract your taxes from your Gross Income to determine your updated net income . Please use formulas for your calculations Tax calculations should be listed for each type of tax no more...

1.If profit after tax and interest is $400,000; interest expense is $50,000 and taxation expense is...

1.If profit after tax and interest is $400,000; interest expense is $50,000 and taxation expense is $84,000; profit before interest and tax is: 2.If the beginning balance of equity is $82,000; the ending balance is $37,000; and the loss for the period is $33,000; how much did the owner withdraw during the period for personal use? 3.The balance sheet usually reports the entity's financial position for both the current period and the previous period. This information is known as:

1. (TRUE or FALSE?) Compound interest decreases as the number of years increases. 2. (TRUE or...

1. (TRUE or FALSE?) Compound interest decreases as the number of years increases. 2. (TRUE or FALSE?) The process of converting the initial amount into a future value is called discounting. 3. (TRUE or FALSE?) The future value is simply the current value of a future cash flow that has been discounted at the appropriate discount rate.

1. What are the general requirements for a medical expense to be considered deductible? 2. For...

1. What are the general requirements for a medical expense to be considered deductible? 2. For state or local property taxes to be deductible as an itemized deduction, what three tests are required? 3. What happens to a charitable contribution that is in excess of the AGI limits?

1)True or False: Ambiguity is a type of vagueness True False 2)True or False: When determining...

1)True or False: Ambiguity is a type of vagueness True False 2)True or False: When determining whether a report of an argument should be treated as an argument, it is important to consider the context in which the report is made. True True False 3) True or False: In a V argument with two premises, if one of the premises is false, then the argument is definitely weak True False 4) True or False: A report of an argument can...

1. True or False: Disaster Planning is not part of the BCP? 2. True or False:...

1. True or False: Disaster Planning is not part of the BCP? 2. True or False: you still need a BCP or DRP if you have business liability insurance, asset replacement insurance and natural disaster insurance 3. True or False: If a business cannot operate, the BCP assists in bringing the business back to life and operational readiness. 4. True or False: a BIA helps define the scope of the BCP itself. 5. True or False: The purpose of having...

Hobby expenditures are deductible to the extent of hobby gross income. Is this true or false?

Question

TRUE / FALSE 1. Both interest expense and dividends are tax deductible 2. The APR (or...

Solutions

Expert Solution

Related Solutions

True/ False questions 1) Dividends paid to stockholders are tax deductible on a corporations income Statement....

Which of the following is/are tax-deductible expense(s) for a corporation? a. Dividends paid on the corporation’s...

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses...

1. List tax -deductible expenditures and the deductible amount 2. Below the list of deductible expenses...

1.If profit after tax and interest is $400,000; interest expense is $50,000 and taxation expense is...

1. (TRUE or FALSE?) Compound interest decreases as the number of years increases. 2. (TRUE or...

1. What are the general requirements for a medical expense to be considered deductible? 2. For...

1)True or False: Ambiguity is a type of vagueness True False 2)True or False: When determining...

1. True or False: Disaster Planning is not part of the BCP? 2. True or False:...

Hobby expenditures are deductible to the extent of hobby gross income. Is this true or false?