Answer by true or false: 1)The relationship between book calue and market price of capital stock...

Answer by true or false:

1)The relationship between book calue and market price of capital stock is a measure of investors’ confidence in a company’s management.

2)When a corporation issues capital stock, most state laws require the corporation to credit Retained Earnings for the par value shares of stock issued.

3)A stock split will normally increase the market price of the stock and decrease the number of shares on the market.

Solutions

Expert Solution

Ans:

True, yes the relationship between the Book value and Market price of the shares can be used as a measure for investors confidence in the company's management. When the book value is low but market price is trading high, it means the investor sees the potiential in the management for company's growth.

False, when a corpotration issue capital stock , states require to credit the common stock with PAR value. Retained earnings are the balance of company's net income and accumulated profits from the past.

False, A stock split means splitting stocks into parts, this will increase number of shares and will reduce the market price of the share proportionately.

For any query please ask in comment box, we are happy to help you. Also please don't forget to provide your valuable feedback. Thanks!

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Answer the following by True(T) or False (F) 1. The short-run relationship between labor supply and...

Answer the following by True(T) or False (F) 1. The short-run relationship between labor supply and real wage is more likely to be represented by an upward-sloping labor supply curve than by a downward-sloping one. 2. The long-run relationship between labor supply and real wage is more likely to be represented by an upward-sloping labor supply curve than by a downward-sloping one. 3. According to the data on the long-run trend of the average number of hours worked, the substitution...

ANSWER THESE QUESTIONS USING TRUE OR FALSE: a. Gauss’s Law describes the relationship between the net...

ANSWER THESE QUESTIONS USING TRUE OR FALSE: a. Gauss’s Law describes the relationship between the net electric flux through a closed surface and the charge enclosed INSIDE the surface. b. Gauss’s Law describes the relationship between the net electric flux through any surface (either open or closed) and the charge around (either inside or outside) the surface. c. When a point charge is at the center of a spherical surface, its E field is EVERYWHERE normal to the surface and...

QUESTION 1: True or False A) Changes in the stock price and the number of shares...

QUESTION 1: True or False A) Changes in the stock price and the number of shares available will evoke changes in the “market cap.” True False B) After an IPO, the value of a company’s securities is set by the market through the laws of supply and demand True False C) An example of direct financing is when a company raises funds from commercial banks, insurance companies, pension funds, and venture capital firms. True False D) The concept of “currency...

1. A single firm in a perfectly competitive market is a price taker? True or False....

1. A single firm in a perfectly competitive market is a price taker? True or False. Explain with examples. 2. What is the supply curve of a perfectly competitive firm? Is it different from that of the market supply curve? Explain. 3.If a firm makes a loss in the short run, then it would shut down? If no, discuss. If yes, discuss.Offer examples 4. Does the monopolist have a supply curve? Discuss

Answer True or False to the following questions: 1. An oligopolist who sets the price for...

Answer True or False to the following questions: 1. An oligopolist who sets the price for the industry is a price leader. 2. Command economies are able to achieve greater allocative efficiency than market economies. 3. Unlimited liability is a distinct advantage of the proprietorship. 4. Game theory is not useful for analyzing perfectly competitive markets. 5. The “invisible hand” refers to the control that government must exercise over a market economy.

Answer each question by True or False. Justify your answer. (1) True or False? The set...

Answer each question by True or False. Justify your answer. (1) True or False? The set V = {p ∈ P2: p (7) = 0, p’ (7) = 0} is a subspace of P2. (2) True or False? The set of 2 by 2 matrices whose entries are either all 0 or all nonzero is a subspace of the set of all 2 by 2 matrices M2×2(R). (3) True or False? The set of all functions in C([0, 1]) such...

Answer the following questions True or False. Write “True” or “False” in the blank. 1._________ The...

Answer the following questions True or False. Write “True” or “False” in the blank. 1._________ The rate constant changes if the concentrations of the reactant change. 2._________ If the concentration of a reactant changes, the rate of the reaction always changes. 3._________ The coefficients of the overall reaction tell us the order for each reactant. 4._________ The half-life for a first order reaction does not depend on the initial concentration. 5._________ If the rate of a reaction over a long...

Is the following statement true or false: "The correlation between (U.S.) stock market returns and long-term U.S....

Is the following statement true or false: "The correlation between (U.S.) stock market returns and long-term U.S. treasury bond returns is generally negative during times when equity markets are crashing." True False Is the following statement true or false: " Consider a strategy that buys 1-year US treasury bonds, holds them to maturity, and uses the proceeds from the maturing bonds to buy new 1-year bonds. In this case, the actual/realized returns is uncertain, but it is always positive." True False...

1. True or False: In a price-taker market, if a business operator produces inefficiently—and the cost...

1. True or False: In a price-taker market, if a business operator produces inefficiently—and the cost of producing the good is maximized—the operator will be able to make at least a normal profit. 2. True or False: When the firms in the industry are just able to cover their cost of production, economic profit is zero. Therefore, if demand falls, causing prices to go down even a little bit, economic profits will be negative in the long run.

Answer True or False for all questions: 1. A society that relies on a market-based economy...

Answer True or False for all questions: 1. A society that relies on a market-based economy will always protect the natural environment. 2. With the technological developments in the twenty-first century, productivity growth is no longer an important factor in economic well-being. 3. The minimum wage is an example of a government price ceiling and results in a reduction in unemployment. 4. Efficient production can be carried out anywhere on or beyond the production possibilities frontier. 5. An economist would...

Subjects