1. based on the residual dividened policy, if company has better operating performance with a higher net income, it has more cash which can be distributed to common shareholders given the same capital budget

a true

b false

A reverse stock split will cause a change in total dollar amount shown in which of the following balance sheet accounts?

a. cash and equivalents

b. common stock

c. retained earnings

d. none of the above

A negative value of the additional funds needed which is generated when we forecast pro forma balance sheet for a company means that the company has more financing than needed. the company can use the funds to

a. buy stock back

b. pay off debt

c. buy short term investments

d. all of the above

Toms books sells paperback books for $5 each. the variable cost per book is $4. The fixed cost are $40,000. Whats the publishers breaking even sales volume?

a. 8,000 books

b 10,000

c. 20,000

d. 40,000