Financial leverage characteristic of long-term debt

Assignment Help Accounting Basics
Reference no: EM13138166

The financial leverage characteristic of long-term debt results in:

a. a reduction of the risk that creditors will not be paid.

b. a magnification of ROE relative to what it would be without long-term debt.

c. a magnification of ROI relative to what it would be without long-term debt.

d. the deductibility, for income tax purposes, of dividends to stockholders.

Reference no: EM13138166


Write a Review


Accounting Basics Questions & Answers

  Evaluate the practical and conceptual reasons

Evaluate the practical and conceptual reasons for the reporting requirements of research and development costs required by GAAP. Do you agree with the reporting requirements? Explain your response.

  Creating competitive advantage

If a firm decided to reevaluate and reorganize the way it did business, in hopes of creating competitive advantage, by changing or decreasing jobs, the company would be using which of the following management technique?

  How can a firms security policies contribute

How can a firm's security policies contribute and relate to the six main business objectives and give example.

  Completing the consolidated workpaper

P sold merchandise to S during the year in the amount of $30,000. $10,000 worth of inventory is still on hand at the end of the year with an unrealized profit of $4,000. The separate company statements for P and S appear in the first two columns o..

  Determine the tax consequences to gamma-marsha

On January 2 of the current year, Gamma liquidates and distributes all property to Marsha except that Gamma retains cash to pay the accounts payable and any tax liability resulting from Gamma's liquidation. Assume that Gamma has no other taxable i..

  Applied factory overhead for the period

At the end of the period, the factory overhead control account for Department A had a debit balance of $260,000; actual direct labor hours were 63,000. What was the under- or over applied factory overhead for the period

  What is the correct journal entry for the sale of the stock

At the Board of Director's meeting to review the year-end financial statements, they were concerned that the gain on the sale of the stock was not reported on the income statement. They believed that since the stock was sold at a price higher than..

  Statement of cash flows using indirect method

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

  Explain the accounting treatments for notes

Fixed rate notes and bonds have interesting dynamics that respond to various economic factors affecting the market or fair value of those instruments. There are several potential results from the issuance of fixed rate instruments.

  Substantive test of transactions problem

A substantive test of transactions to test the completeness assertion includes?

  Evaluate and comment on both the immediate

Indicate increase (+), decrease (-), or no effect (NE). Make sure your answer is CLEAR in terms of all items below (1-13) and that you make an entry for EACH column (Net Income, Cash From Operations, and Cash Position).

  Trade between buyer and seller

Suppose that the terms of trade between a buyer and a seller are free on board (FOB) destination. What document provides evidence that a liability exists and might be unrecorded?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd