Transaction costs and personal taxes may affect investors' ability to undertake arbitrage. Also, a firm's earnings are taxed, and interest payments are deductible while dividends are not
These are examples of the violation of which of the assumptions of an ideal capital market?
a. Capital Markets are frictionless
b. Homogeneous expectations
c. Atomistic competition
d. The firm has a fixed investment program
e. Once chosen, the firm's financing is fixed
A
You might also like to view...
On June 30, Caroline, Inc finished Job 750 with total job costs of $4,400 and transferred the costs to Finished Goods Inventory
On July 6, Caroline completed the sale of the goods from Job 750 to a customer for $6,000 cash. Which of the following is the correct entry needed to record the revenue earned? A) debit Finished Goods Inventory $4,400 and credit Sales Revenue $4,400 B) debit Cash $6,000 and credit Sales Revenue $6,000 C) debit Sales Revenue $6,000 and credit Cash $6,000 D) debit Cost of Goods Sold $4,400 and credit Sales Revenue $4,400
An applicant earns $2,100 every two weeks. Her monthly income would be
A. $2,100 B. $4,200 C. $4,400 D. $4,550