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Compare performance shares with a restricted stock grant as a means of motivating management to act in shareholders' best interests.
If this business were formed as a partnership, with the sharing of profits and losses based on the proportion of each partner's original investment.
What is the primary distinction between a money market security and a capital market security?
How risky is buying the commercial paper of a corporation relative to, say, buying its common stock?
How does collateral affect a security's riskiness? How does collateral affect the return required by investors?
Consider a convertible security that gives the owner the right to exchange it for another security within a specified period of time.
Describe the maturity and cash flow characteristics of common stock, preferred stock, and corporate debt securities.
Suppose International Business Machines (IBM) needs to raise new capital. List and briefly describe the three methods of raising capital.
A local brokerage firm claims that following their strategy of investing in securities whose company name begins with the letter M.
Suppose an executive exercises her stock options just prior to the year, buying the shares and then selling them immediately, in order to avoid an anticipated.
Suppose you are manager of a corporation and you feel that it will do better in the future than most analysts believe.
If the United States firms adopt IFRS, what implications will this have for United States firms that use LIFO?
What type of times interest earned ratio would be desirable? What type would not be desirable?
Would you expect a telephone company to have a high debt ratio? Discuss.
Discuss how noncash charges for depreciation, depletion, and amortization can be used to obtain a shortrun view of times interest earned.
Explain how the debt/equity ratio indicates the same relative long-term debt-paying ability as does the debt ratio, only in a different form.
How should lessees account for operating leases? Capital leases? Include both income statement and balance sheet accounts.
Capital leases that have not been capitalized will decrease the times interest earned ratio. Comment.
Indicate the risk to a company if it withdraws from a multiemployer pension plan or if the multiemployer pension plan is terminated.
What portion of net worth can the federal government require a company to use to pay for pension obligations?
Explain why deferred taxes that are disclosed as long-term liabilities may not result in actual cash outlays in the future.
Comment on the implications of relying on a greater proportion of short-term debt in relation to longterm debt.
When a firm guarantees a bank loan for a joint venture in which it participates and the joint venture is handled as an investment.
Indicate why comparing firms for postretirement benefits other than pensions can be difficult.
Compute the times interest earned.Compute the cash basis times interest earned.