Question

For a company, financial risk arises from the use of _____. common equity fixed-income securities such...

  1. For a company, financial risk arises from the use of _____.
  1. common equity
  2. fixed-income securities such as bonds
  3. fixed operating costs
  4. retained earnings
  5. all of the above

Homework Answers

Answer #1

Option B is correct

This is the reason because the debt holders should get paid the interest irrespective of the company financial status and the company is subject to the interest rate risk also. So the most effected by the debt holders only.

The common equity will not give financial risk because they are not liable directly to the customer to pay money.

Retained earnings will make company more profitable, so it does not give risk

The operational costs try to make the company more profitable .

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Identify if the financial statements accounts are located on a balance sheet or income sheet? Identify...
Identify if the financial statements accounts are located on a balance sheet or income sheet? Identify whether the account is an Asset, Liability, Shareholder Equity, Revenue, Expense, or Not Applicable? Accounts Payable Common Stock Sales Revenue Equipment Retained Earnings Bonds Payable Dividends Paid Inventory Insurance Expense Accounts Receivable Cash Flow from Investing Activities Cash Payroll Expense Builings Administrative Expense Interest Income Cash Flor for Operating Activities Inventory Cost of Goods Sold Marketable Securities Accounts Receivable Retained Earnings Income Tax Expense...
Use the data from the following financial statements What are the net fixed assets for the...
Use the data from the following financial statements What are the net fixed assets for the years 2013 and​ 2014? The net fixed assets for the year 2013 is please explain a step by step process Partial Income Statement Year Ending 2014 Sales revenue $350,000 Cost of goods sold $140,000 Fixed costs $43,000 Selling, general, and administrative expenses $28,000 Depreciation $46,000 Partial Balance Sheet 12/31/2013 ASSETS LIABILITIES Cash $16,000 Notes payable $14,000 Accounts receivable $28,000 Accounts payable $19,000 Inventories $48,000...
E9-7 Assessing Financial Statement Effects of Marketable Equity Securities Use the financial statement effects template to...
E9-7 Assessing Financial Statement Effects of Marketable Equity Securities Use the financial statement effects template to record the following four transactions involving investments in marketable equity securities. Assume that these transactions occur in 2018 a. Purchased 18,000 common shares of Beez Inc. for $12 cash per share b. Received cash dividend of $1.20 per common share from Baez c. Year-end market price of Baez common stock was $11.25 per share d. Sold all 18000 common shares of Bez for $213,600
Interest rate risk arises from changes in: Select one: a. currency discount rates b. the value...
Interest rate risk arises from changes in: Select one: a. currency discount rates b. the value of fixed income securities because of changes in interest rates c. interest rates caused solely by inflation d. the value of currency relative to another currency
The financial data for a corporation is provided to calculate all the following question. Most recent...
The financial data for a corporation is provided to calculate all the following question. Most recent annual common dividend $4.00 Today’s common stock price $50.00 U.S. Treasury 10y annual rate 3 percent Market risk premium 5 percent Equity Risk Premium on Bond Yield 10 percent Number of common shares outstanding 2.5 million Today’s preferred stock price $100.00 Fixed preferred dividend $8.00 Constant growth rate 6 percent Beta β 2.0 Floatation costs for Preferred and common stock issuance 7 percent Market...
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety...
You have just been hired as a financial analyst for Lydex Company, a manufacturer of safety helmets. Your boss has asked you to perform a comprehensive analysis of the company’s financial statements, including comparing Lydex’s performance to its major competitors. The company’s financial statements for the last two years are as follows: Lydex Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash $ 970,000 $ 1,210,000 Marketable securities 0 300,000 Accounts receivable, net 2,740,000 1,840,000 Inventory 3,610,000...
Calculation of net income from the change in stockholders' equity. Presented below are changes in the...
Calculation of net income from the change in stockholders' equity. Presented below are changes in the account balances of Wenn Company during the year, except for retained earnings. Increase Increase (Decrease) (Decrease) Cash $29,000 Accounts payable $34,000 Accounts receivable (net) (18,000) Bonds payable (20,000) Inventory 52,000 Common stock 62,000 Plant assets (net) 57,000 Paid-in capital 16,000 The only entries in Retained Earnings were for net income and a dividend declaration of $17,000. 1. Compute the net income for the current...
Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $...
Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $ 460 1.4 % Accounts receivable 6,040 18.3 Inventory 9,480 28.8 Total current assets $ 15,980 48.5 % Net property, plant, and equipment 16,960 51.5 Total assets $ 32,940 100.0 % Accounts payable $ 7,220 21.9 % Short-term notes 6,790 20.6 Total current liabilities $ 14,010 42.5 % Long-term liabilities 7,020 21.3 Total liabilities $ 21,030 63.8 % Total common shareholders’ equity 11,910 36.2 Total...
Financial statements for AAR Company appear below: AAR Company Balance Sheet December 31 Current assets:    ...
Financial statements for AAR Company appear below: AAR Company Balance Sheet December 31 Current assets:     Cash and marketable securities $21,000     Accounts receivable, net 160,000     Inventory 300,000     Prepaid expenses          9,000       Total current assets 490,000 Noncurrent assets:     Plant & equipment, net      810,000 Total assets $1,300,000 Current liabilities:     Accounts payable $75,000     Accrued liabilities 25,000     Notes payable, short term      100,000        Total current liabilities 200,000 Noncurrent liabilities:     Bonds payable      300,000...
Following are partially completed financial statements​ (income statement, statement of retained​ earnings, and balance​ sheet) for...
Following are partially completed financial statements​ (income statement, statement of retained​ earnings, and balance​ sheet) for Loving Corporation. Complete the financial statements. All amounts are in millions. Loving Corporation Income Statement Year Ended December 31, 2018 (millions) Net sales $186 Expenses 106 Net income (loss) $ a Loving Corporation Statement of Retained Earnings Year Ended December 31, 2018 (millions) Beginning retained earnings $72 Net income b Cash dividends declared (9) Ending retained earnings $ c Loving Corporation Balance Sheet December...