Footnotes to Financial Statements

question 47

Multiple Choice

Footnotes to financial statements

• A)more fully explain certain items in the financial statements.
• B)reflect financial notes personalized by the company's executive team.
• C)show the detail of salaries of every employee.
• D)justify fraudulent business practices.

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Definitions:

Cost of Equity

The theoretical earnings paid by a business to its equity holders as compensation for the risk they take by investing.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, often paying fixed dividends.

Tax Rate

The share of earnings upon which a person or corporation is taxed.

Market Risk Premium

The Market Risk Premium refers to the extra yield an investor anticipates receiving for investing in a volatile market portfolio over risk-free securities.