In Addition to Gaining Liquidity, Which of the Following Could

question 39

Multiple Choice

In addition to gaining liquidity, which of the following could also be considered a legitimate reason for cross-listing equity?

• A) enhance a firm's local image
• B) become more familiar with the local financial community
• C) get better local press coverage
• D) all of the above

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Definitions:

Operating Lease

A lease agreement for property or equipment that is considered a rental and is not recorded as an asset on the company's balance sheet.

GAAP

Generally Accepted Accounting Principles, a collection of commonly followed accounting rules and standards for financial reporting in the United States.

Lease Classification

The process of categorizing leases as either operating leases or finance (capital) leases based on criteria that affect the lessee's financial statements.

Leveraged Lease

A financing arrangement where the lessor uses borrowed funds to acquire an asset which is then leased to a lessee, allowing for tax benefits and risk distribution.