Which of the following statements is incorrect? O When interest expense is subtracted from EBIT, the result is EBT, or earnings before taxes. O One of the limitations of the accounting statements that they are historical and based on data such as the cost of a building that was built years ago. O Like common stock dividends, preferred stock dividends are declared by the board of directors, and in the event of financial distress, the board can elect not to pay a preferred stock dividend. All the answers are correct except one. CFOA EBIT + Current taxes - Noncash expenses.
Which of the following statements is incorrect? O When interest expense is subtracted from EBIT, the result is EBT, or earnings before taxes. O One of the limitations of the accounting statements that they are historical and based on data such as the cost of a building that was built years ago. O Like common stock dividends, preferred stock dividends are declared by the board of directors, and in the event of financial distress, the board can elect not to pay a preferred stock dividend. All the answers are correct except one. CFOA EBIT + Current taxes - Noncash expenses.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Which of the following statements is incorrect?
O When interest expense is subtracted from EBIT, the result is EBT, or earnings before taxes.
O One of the limitations of the accounting statements that they are historical and based on data such as the
cost of a building that was built years ago.
O Like common stock dividends, preferred stock dividends are declared by the board of directors, and in the
event of financial distress, the board can elect not to pay a preferred stock dividend.
All the answers are correct except one.
O CFOA-EBIT + Current taxes-Noncash expenses.
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