Which of the following is false?     An increase in the cost of common share may be due to an increase in share’s beta   The cost of common shares can be classified as a cost of retained earnings or cost of issuance of new shares.   Floatation cost affects the cost of equity from newly issued stocks and this impacts the weighted average cost of capital   The floatation cost which is deducted against the stock issue price should always be considered in all scenarios of computing the cost of ordinary stock.

Q: Which of the following statements is true? I. The formula for the return on equity is: Return on…

A: Stockholder's equity is the amount of money invested by the shareholders' in the entity. It is…

Q: hich statement about book value per share (BVPS) is true??? A. Market price per share usually…

A: When company start the operations than company issues shares and they are issued at very low prices…

Q: When additional shares of stock are issued, the earnings per share decreases (assuming no change in…

A: EPS are determined by dividing gains to equity owners by the aggregate number of equity shares…

Q: A class of Efficient Market Hypothesis that implies all public information is calculated into a…

A: Efficient Market Hypothesis is the market theory which depicts that market is generally efficient…

Q: Explain the effect of D/E on asset returns, equity returns (assuming that cost of debt is not…

A: Three main actors of production namely land, labor and capital are given primary importance. Capital…

Q: Generally the smaller the value of a stock transaction, the higher the percentage commission charged…

A: False. In general, the percentage commission charged on a stock transaction tends to decrease as the…

Q: When treasury stock is purchased for more par value of the stock and the cost method is used to…

A: Hi student Since there are multiple questions, we will answer only first question.

Q: When treasury stock is sold below cost, the Paid-in Capital, Treasury Stock account is debited for…

A: Treasury stock refers to previously issued stock that the issuing business buys back from…

Q: Under a Rights Issue, once the shares h been issued the NEW Market price wou be. . Above the Subs…

A: Through Rights issue, company raises capital from Shareholders by issuing shares at a discount. As…

Q: The date on which we would expect to see the price of a share fall by the value of the dividend is…

A: a. the declaration date - It is the date when the company announces that dividend will be paid on…

Q: hen treasury stock is sold for less than its cost, the entry should include a debit toa. Gain on…

A: When treasury stock is sold for less than its cost, then amount of cash received is debited, cost of…

Q: Which of the following statements about stock dividends is not true? Stock dividend is the only…

A: Stock dividend is the payment of dividends in form of shares instead of cash.

Q: Which of the following is the reason that preferred dividends declared during the period are…

A: Identify the correct option: Earnings per share (EPS): The amount of net income available to each…

Q: Evaluate following statement: “A lower dividend would result a lower share price.”

A: Dividend is distribution of profits to shareholders. Such distribution of profits to shareholders…

Q: The stock market valuation/capitalization of a company in the NY Stock Exchange is based on the…

A: Market capitalization or stock market value = no. of shares * market price per share

Q: All of the following statements regarding common stock valuation are correct EXCEPT I. fundamental…

A: Fundamental analysis seeks to estimate the intrinsic value of the stock through valuation models…

Q: How does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share…

A: stock split is a decision by a company's board of directors to increase the number of shares that…

Q: Which of the following statements regarding the dividend discount model f computing stock prices…

A: According to the Gordon’s Model, the market value of the share is equal to the present value of…

Q: The price of the new share after dividends are paid is showing as incorrect?

A: Working Note#1Compute the amount of cash needed to finance the proposed dividend:Cash…

Q: Which statement about book value per share (BVPS) is true A. Market price per share usually…

A: Common shares the ordinary shares that are being issued by the company, on which dividends needs to…

Q: The value of preferred stock is based on earnings per share.  Select one: True False

A: The value of a preferred stock is the sum of the present value of its annual dividends and is based…

Q: What is the effect of purchasing treasury stock on a company’s earnings per share and return on…

A: Treasury stock refers to those shares which are repurchased from the existing shares , so this…

Q: Which of the following is not true for Book Value of a share? * It depends on the balance sheet…

A: Book value of share: The book value is calculated on the basis of the book value of assets and…

Q: The payout ratio is calculated by dividing Select answer from the options below - (I selected "b")…

A: The ratio is the technique used by the prospective investor or an individual or strategist to read…