Borrowing more money will always increase a company's return on equity because the company is
using financial leverage, but it also adds to the riskiness of the company.
Indicate whether the statement is true or false
FALSE
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Which of the following is generally NOT TRUE of stock repurchase plans?
A) Stock repurchase plans effectively allow shareholders to choose their own dividend policy. B) Stockholders who sell all or part of their shares back to the firm as part of an announced stock repurchase plan pay taxes at an ordinary rate rather than the capital gains rate because the IRS recognizes these plans as thinly veiled attempts to reduce stockholder tax liabilities. C) About 30% of announced stock repurchase plans are fully completed. D) About 35% of announced stock repurchase plans are never started.
After a lower-of-cost-or-market write down, Inventory will ________
A) increase by the difference between the historical cost and the replacement cost B) decrease by the difference between the historical cost and the replacement cost C) the same D) decrease by the replacement cost