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

Q: In order to arrive at an intrinsic value for the stock of a company when using the Corporate…

A: Corporate Valuation Model:- This model is also known as the cash flow method, it helps in suggesting…

Q: Share premium is an income to the company. Select one: True False

A: Solution: Share premium is the amount in excess of par value received by the company on issue of…

Q: hich statement about book value per share (BVPS) is true??? A. Market price per share usually…

A: When company start the operations than company issues shares and they are issued at very low prices…

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: 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: 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: Which of the following statement is false in regards to Share premium? a. It will be shown under…

A: (a) Share premium will be shown under equity section in the balance sheet (b) Share premium will be…

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: The weak-form of EMH implies which of the following may be used to earn an abnormal return and beat…

A: Weak form efficiency is the first level of market efficiency under the efficient market hypothesis.

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 statements is incorrect? Multiple Choice О Purchasing fixed assets through…

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

Q: What is different between residual dividend, dividend policy and share repurchase ?

A: To arrange the funds for the business operations, firms issue various securities and pay return on…

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: n stock appreciation right, decline in fair value of share shall be accounted as A. Loss and…

A: The prices of shares goes up and down and adjustment are to be done for that.

Q: A company's market value is generally less than its book value. True of Falses ?

A: Fixed Assets are the Non-current portion of the assets that disclosed in the assets section of the…

Q: What is meant by Forfeiture of shares?

A: Common stock: Common stock is the instrument used by the company for raising funds from the general…

Q: issued shares to another company or individual. This a transaction that would be traded in the…

A: There are primary as well as secondary market

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: Identify the term being referred to: A theory that states that how high or low an entity pays out…

A: Solution:- There are two theories related to dividend-  Dividend relevance theory and dividend…

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: 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: Earnings and profits are conceptually similar to retained earnings.     A distribution from…

A: The dividend can be paid either from current earnings and profits or from the accumulated earnings…

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: Which of the following statement is true? a. In brokered markets, buyers and sellers confront…

A: Introduction: The primary market is where the new offerings are issued to the public. The companies…

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: A stock market analyst is

A: Answer : Weak form efficiency

Q: Which equity valuation method is not driven by market or economic conditions or similar companies?…

A: Equity valuation methods are techniques used to estimate the intrinsic value of a company's equity…

Q: Which statement about book value per share (BVPS) is true A. Market price per share usually…

A: Common shares the ordinary shares that are being issued by the company, on which dividends needs to…

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: When a share split occurs, the aggregate par value of issued shares will change. * True O False

A: Share split means to divide the shares and increase them in numbers and alternatively adjusting the…

Q: Which of the following is not true for Book Value of a share? * It depends on the balance sheet…

A: Book value of share: The book value is calculated on the basis of the book value of assets and…

Q: hat does it mean when a company has zero net income but its stock price has increased? How do you…

A: Equity method: The equity method is used to record the profit earned by a company by investing in…

Q: When you are purchasing a company stock, you are purchasing part of the company.

A: Companies issue stocks or shares for raising money from those investors who want to invest their…

Q: why should a company invest in the stock of another company?

A: When a company invests in the stock of another company, it is known as Inter-corporate investments.

Q: Statement I. Book value per share is tantamount to earnings per share Statement II. Dividends…

A: Book value per share is ratio of shareholders equity less preferred equity to number of shares…

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: Which of the following statements is false?   A.   Mutual funds are pool investor funds to…

A: Working capital is the capital which is required to operate day to day working of a business. It…

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…

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.