Which of the Following Statements Is CORRECT

question 91

Multiple Choice

Which of the following statements is CORRECT?

• A) when calculating the cost of preferred stock, companies must adjust for taxes, because dividends paid on preferred stock are deductible by the paying corporation.
• B) because of tax effects, an increase in the risk-free rate will have a greater effect on the after-tax cost of debt than on the cost of common stock as measured by the capm.
• C) if a company's beta increases, this will increase the cost of equity used to calculate the wacc, but only if the company does not have enough reinvested earnings to take care of its equity financing and hence must issue new stock.
• D) higher flotation costs reduce investors' expected returns, and that leads to a reduction in a company's wacc.
• E) when calculating the cost of debt, a company needs to adjust for taxes, because interest payments are deductible by the paying corporation.

Identify measures to enhance payment security in e-commerce.

Understand the purpose and function of public key cryptography in secure transactions.

Compare and contrast the functionalities of digital payment services.

Recognize different types of e-commerce websites and their purposes.

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Definitions:

Direct Materials

Items that directly enter into the final product and can be easily traced and assigned to it.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including materials, labor, and overhead.

Overhead Applied

An accounting method that allocates overhead costs to specific cost objects, such as products or jobs, based on a pre-determined rate or base.

Job Order Costing System

An accounting system used to assign costs to specific jobs or orders, tracking the direct materials, direct labor, and manufacturing overhead per job.