Secondary market trading of a company’s previously issued shares directly affects the company’s real asset productivity.  True  False

Q: Describe the primary reasons that a company’s book value in the balance sheet does not equal its…

A: Balance sheet: This is a financial statement that reports a company’s resources (assets) and claims…

Q: Equity Investment classified at Fair Through Other Comprehensive Income (choose which of the…

A: Long term investments are the investment or assets that are beneficial for the firm for a number of…

Q: Explain what ‘short selling’ means and how short-sellers profit from a fall in share prices.

A: Short-selling refers to strategy in which the investor acts as a speculator in this strategy the…

Q: What is the effect of a company electing the fair value option with respect to an investment that…

A: Equity method: Equity method is the accounting method used for accounting equity investments which…

Q: Generally the smaller the value of a stock transaction, the higher the percentage commission charged…

A: False. In general, the percentage commission charged on a stock transaction tends to decrease as the…

Q: under what circumstances might a company choose not to pay dividends?

A: Dividend Payment and non-payment will be decided by the company based on the future opportunity of…

Q: When a company issues (i.e., sells) common shares to investors in exchange for cash, the effect of…

A: When shares are issued in cash then cash is increased by the no. of shares issued multiply be the…

Q: For investors, the function of secondary markets is to provide marketability for the shares of…

A: Secondary market is a type of market where investors buy and sell securities or assets from other…

Q: 2. This represents a share of interest in a firm representing rights of ownership and claims of…

A: Introduction: Shareholders are considered as the owners of a company as they provide funds to the…

Q: Even if no share of stock issues of bond are sold, a firm still incurs a cost of internall equity or…

A: Variable cost is the cost incurred for per unit produced, whereas fixed cost is independent of units…

Q: Suppose a firm maintains its preferred debt-equity and pays dividends only after meeting its…

A: Company with growth opportunities available distribute dividend after meeting the requirements of…

Q: Can you please explain in a summary of (one or two paragraphs) how you get the answer of section A…

A: WACC is the weighted average cost of capital tells the average return expected by each security…

Q: Dividend revenue is recognized for trading securities and available for sale securities even if held…

A: Solution Concept Dividend is recognized in income statement for trading securities if they are held…

Q: In applying the equity method of accounting for an Equity Investment, profit on intercompany sales…

A: Explanation: Equity method: The equity method is an accounting method that is to be used to record…

Q: Why may a company wish to reduce its Share Capital?

A: Introduction:- Share capital means company raise funds through issuing of shares. shares are…

Q: Which of the following may not affect retained earnings or earned capital? Correction of prior…

A: The question is related to retained earnings. The retained earnings will be affected by Profit or…

Q: Floatation or issuance cost of new securities are present in an imperfect economy.     True False

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Commodities of broker-traders are measured at *

A: As per IAS 2 Inventories, this standard has some exceptions. One such exception is commodity…

Q: Which of the following statements related to securities is not true: O Unrealized gains and losses…

A: The statement that is not true related to securities is given below

Q: Which of the below is NOT TRUE with respect to secondary markets A. Secondary markets assist…

A: Primary market - is the place where company sell new shares to the investors for the first time i.e…

Q: Treasury share should not be classified as a current asset. Select one: True False

A: Lets us have basic understanding of treasury shares. This type of shares refer to shares which were…

Q: Following IFRS, which statement is false? Group of answer choices If the revaluation initially…

A: The objective of this question is to identify the false statement among the given options related to…

Q: Following IFRS, which statement is false? Group of answer choices If the long-term operating…

A: The objective of the question is to identify the incorrect statement regarding the treatment of…

Q: If a company uses a non-GAAP fi nancial measure in an SEC fi ling, then the companymust:A . give…

A: Solution:- If a company uses a non-GAAP financial measure in an SEC filing, then the company must…

Q: company's Degree of Financial Leverage (DFL) is primarily influenced by decisions about:…

A: Financial leverage indicates how business is depending on its debt.

Q: 9. A company invests in marketable securities to:   a) Increase liquidity   b) Reduce tax liability…

A: The incorrect answers are: b) Reduce tax liabilityWhile some investments may provide tax benefits,…

Q: For upstream sales the total amount of unrealized gains and losses are allocated between controlling…

A: Following is the answer to the given question

Q: How does a company determine whether to account for an equity investment using the fair value…

A: Financial Management: In layman’s words, financial management is the management of the finance or…

Q: Equity Investment classified at Fair Through Profit or loss (choose which of the following is false)…

A: Solution: Security held for trading classified at fair value through profit or loss and equity…

Q: Following IFRS, which statement is false? Group of answer choices The revaluation surplus account…

A: The objective of this question is to identify the false statement among the given options related to…

Q: Indicate whether the following statements are true or false. If the statementis false, explain…

A: true

Q: designation s to whether the equity investment is at FVPL or OCI depends upon whether the securities…

A: There are many methods of the valuations and based on the valuation there are classifications of…

Q: Company insiders who can earn excess profits on company stock based on their private knowledge…

A: Stock price depends on the information. As people get information, they start pricing the stock…

Q: One of these components is not included in the current asset of an organisation. O A. Short term…

A: Current assets include those assets that a company can convert into cash within a year. Current…

Q: The market capitalisation of a brand as reflected by their share price on the stock exchange is…

A: The market capitalization of a firm is the entire current value of its equity. A corporation's…

Q: The declaration of the dividends by a company has no effect on the retained income of the company,…

A: Approach to solving the question: Analyze the question. Detailed explanation:The declaration of…

Q: The cash flows associated with common stock are more difficult to estimate than those related to…

A: Common stock is the pool of common shares that a company issues

Q: How is book value per share calculated? Explain why book valuesoften deviate from market values.

A: Book value per share is overall value of company’s assets on its balance sheet. It means the value…

Q: In calculating the value of a firm's equity which of the following is incorrect? Multiple Choice O O…

A: The value of a firm refers to the economic worth or financial significance assigned to the entire…

Q: Discuss the arguments for each position. Some individuals maintain that the only proper accounting…

A: The argument for this statement is this that whether to use current value or not is totally depends…

Q: If a firm's tangible assets are measured at their fair (intrinsic) value, one must forecast that…

A: Fair (Intrinsic) value: When the price of tangible assets such as buildings, machinery, etc. is…

Q: In the DuPont return on equity disaggregation, which of the following is NOT a driver of…

A: The Dupont Return on Equity (ROE) is a financial metric that breaks down the return on equity into…

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.