Below Are 2005 and 2006 Balance Sheets of Hasbro, Inc

question 38

Multiple Choice

Below are 2005 and 2006 balance sheets of Hasbro, Inc. (numbers are in thousands of dollars) : The market value of Hasbro's shares was $27.25 a share at the end of 2006 and $20.18 a share at the end of 2005.
-Refer to the information above. Which of the following statements regarding changes in Hasbro's capital structure from 2005 to 2006 is true?

• A)Hasbro's use of short-term financial debt increased in 2006.
• B)Hasbro has increased its overall use of debt financing in 2006.
• C)Hasbro is using less financial debt and more non-financial debt in 2006.
• D)None of the above is a true statement.

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Definitions:

Flow-Through Entities

Business entities that pass their income, deductions, and credits down to their owners for tax purposes, avoiding taxation at the corporate level.

LLC's

Stands for Limited Liability Companies, a business structure in the U.S. that offers personal liability protection to its owners but can be taxed as a partnership.

S Corporations

A special designation of corporation that allows income to be taxed only at the shareholder level, avoiding double taxation.

Flow-Through Entities

Entities through which income flows to the owners or investors, avoiding corporate income tax.