A Contingent Liability Is Reported on the Balance Sheet If

question 59

True/False

A contingent liability is reported on the balance sheet if it is probable and can be estimated.

Determine the appropriate weights of debt and equity in the calculation of a firm's WACC.

Understand that the costs of different capital components (equity, preferred stock, debt) constitute the overall cost of capital for a company.

Understand the concept of financial leverage and how it impacts stock price and firm value.

Analyze the conditions under which financial leverage benefits shareholders.