In a recent comprehensive survey, corporate CFOs were asked why they did NOT use more equity in their capital structure. Which of the following choices was NOT cited by 50 or more of the CFOs responding to the survey?
A) EPS dilution
B) Concerns that equity was not the least expensive form of financing
C) Concerns that share price might decline
D) All of the above were cited by at least 50 of the responding CFOs.
Question 2
John Box Inc. has an annual interest expense of 30,000 and pays income tax equal to 40 percent of
taxable income (EBT). John Box's times-interest-earned ratio is 4.2. What is John Box's net income?
A) 57,000 B) 126,000 C) 57,600 D) 96,000