Question
Assume that an all equity financed firm has never issued preferred stock. If the firms sole source of revenue comes from the sales of its
Assume that an all equity financed firm has never issued preferred stock. If the firms sole source of revenue comes from the sales of its products, that is, the income statement item Other Income equals zero, then
a. | NI is always greater than NOPAT | b. | None of the statements is correct | c. | NI is always equal to NOPAT | d. | NI is always less than NOPAT |
Below is the equity portion (in millions) of the year-end balance sheet that Glenn Technology has reported for the last two years:
2002
Preferred stock $ 80
Common stock 2,000
Retained earnings 2,000
Total equity $4,080
2001
Preferred stock $ 80
Common stock 1,000
Retained earnings 2,340
Total equity $3,420
Glenn does not pay a dividend to its common stockholders. Which of the following statements is most correct?
a. | Glenn issued common stock in 2002. | b. | Glenn issued preferred stock in both 2001 and 2002. | c. | Glenn started applying computer technology to its production | d. | None of the statements is correct. | e. | Glenn had positive net income in both 2001 and 2002, but the companys net income in 2002 was lower than it was in 2001. |
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