1. Suppose you believe that economy is just entering a recession your firm must raise capital immediately, and debt will be used. Should you borrow on a long-term or short term basis Why?
2. What is the difference between stock dividend and a stock split? As a stockholder, would you prefer to see your company declare an 100% stock dividend or two for one split? Assume that either action is feasible.
3. Financial statements are based on generally accepted accounting principles and are audited by CPA firms. Do investors need to worry about the validity of these statements? Explain