For a Corporation Such as AT&T, What Are the Two

question 114

Multiple Choice

For a corporation such as AT&T, what are the two primary advantages of equity financing?

• A) It never has to be paid back and flotation costs are low.
• B) There is no obligation to pay dividends or to repay the money obtained from the sale of stock.
• C) Interest payments are less than debt financing and principal does not have to be repaid.
• D) Ownership is spread among many individuals and no interest payments are required.
• E) Investors pay top dollar for stock issues and the corporation has higher ongoing expenses.

Calculate total manufacturing overhead costs assigned to specific products using ABC.

Calculate product margins under ABC.

Identify the impact of different cost pools on product costs and margins.

Understand how ABC allocates costs to customer-related activities.

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Definitions:

Loss on Disposal

The financial loss incurred when an asset is sold, discarded, or disposed of for less than its carrying value on the books.

Prior Period Adjustment

Adjustments made to a company's financial statements to correct previously made errors in those statements from earlier periods.

Cumulative Preferred

Refers to preferred stock where dividends accumulate if not paid out, with these unpaid dividends required to be paid out before any dividends can be issued on common stock.

Treasury Stock

Shares that were issued and subsequently reacquired by the issuing company, reducing the amount of outstanding stock.