Describe how each of the following transaction affects the capital structure of
ID: 2383095 • Letter: D
Question
Describe how each of the following transaction affects the capital structure of a company. Is there an effect on the short-term liability portion, the long-term liability portion, the equity portion, or is there no effect at all?a. The issuance of common stock
b. The sale of bonds
c. The purchase of equipment for each
d. The purchase of inventory on credit
e. The purchase of treasury stock
f. The borrowing of ash, with a two-year note, from a bank
g. The declaration of dividends to stockholders
h. The payment of dividends
Explanation / Answer
A. Effect on the short-term liability portion B. Long-term liability portion, C. Equity portion D. There no effect at all? a. The issuance of common stock. C will increase b. The sale of bonds. B will increase c. The purchase of equipment for Cash. D- No effect d. The purchase of inventory on credit. A wil increase e. The purchase of treasury stock. Equity portion wll decrease f. The borrowing of Cash, with a two-year note, from a bank. Short term Liavility will increase g. The declaration of dividends to stockholders. ST Liability will increase h. The payment of dividends. ST Liability will reduce
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.