Which of the following is not true regarding firms use of net assets (assets minus liabilities)?
a. Firms use net assets to generate more net assets through the earnings
b. Firms typically retain some or all of the net assets generated by earnings, causing net assets to increase, along with retained earnings, which is the component of shareholders' equity showing the cause of that increase in net assets.
c. The retention of net assets generated by earnings generally increases the market price of the firm's common shares.
d. Some firms pay periodic dividends to the common shareholders out of net assets.
e. Regardless of whether a firm has more than one class of common stock and their dividend rights differ, each common shareholder always receives the same dividend per share as all other common shareholders.
E
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Indicate whether the statement is true or false
An agent for Zephyr Insurance Company, equipped with business cards, sample Zephyr policies, and an Zephyr rate book, informs a prospect that Zephyr has given him unlimited binding authority. The prospect assumes this is true. Which of the following terms correctly defines the agent's authority in this case?
A) Implied authority B) Binding authority C) Express authority D) Apparent authority"