Under conditions of perfect capital markets, M&M suggest that the average cost of capital for the firm will increase with the addition of debt

For a nonmonetary exchange of plant assets, accounting recognition should not be given to

a. a loss when the exchange has no commercial substance. b. a gain when the exchange has commercial substance. c. part of a gain when the exchange has no commercial substance and cash is paid (cash paid/received is less than 25% of the fair value of the exchange). d. part of a gain when the exchange has no commercial substance and cash is received (cash paid or received is less than 25% of the fair value of the exchange).

Which type of incentive award is used the most because it has the greatest perceived effectiveness?

a. cash b. merchandise c. trips d. promotion e. fringe benefits