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QUESTION 17 Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a regular corporation. Which of the following
QUESTION 17 Cheers Inc. operates as a partnership. Now the partners have decided to convert the business into a regular corporation. Which of the following statements is INCORRECT? Assuming Cheers is profitable, more of its income will be subject to federal income taxes Cheers will now be subject to more regulations Cheers shareholders (the ex-partners) will now be exposed to limited liability, Cheers' investors will find it less difficult to transfer their ownership, Cheers will find it more difficult to raise additional capital. QUESTION 18 A firm has a beta of 1.4. The market return equals 12 percent and the risk-free rate of return equals 6 percent. The estimated cost of common stock equity is 6 percent 7.2 percent 14.4 percent 15.6 percent
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