The Following Is a Summary of the Increases in the Account

question 58

Multiple Choice

The following is a summary of the increases in the account categories of the balance sheet of Riley Company for the most recent fiscal year:

The only change to retained earnings during the fiscal year was for $20,000 of dividends. What was the company's net income for the fiscal year?

• A) $25,000
• B) $15,000
• C) $5,000
• D) $20,000

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Definitions:

Capital Structure

The mix of a company's debt, equity, and other sources of financing used to fund its operations and growth.

Cost of Capital

The minimum return that a business needs to generate on its projects to preserve its marketplace value and draw in financing.

Flotation Costs

Expenses incurred by a company in issuing new stocks or bonds, including underwriting, legal, and registration fees.

Tax Rate

The rate at which taxes are imposed on the income of a person or business.