- Based on Exhibit 1 and White’s notes, which of the following is least consistent with White’s conclusion regarding Bema’s announcement?
A.Bema’s bonding costs will be higher than Aquarius’s.
B.Bema will have a lower degree of operating leverage than does Aquarius.
C.Bema will have a lower percentage of tangible assets to total assets than does Aquarius.
- Based on Exhibit 1 and White’s notes, which of the following is most consistent with White’s conclusion regarding Garth’s announcement?
A.Garth has more business risk than does Holte.
B.Garth invests significantly less in research and development than does Holte.
C.Garth has a more highly developed corporate governance system than does Holte.
[Reference: CFA Institute study material, Volume 3(Corporate Finance) , Reading 23,Practice problem]
It is from the EOC of corporate finance , reading 23. I dont get the underlying insight behind these two questions. Please help me to realize. Any help is appreciated. I am looking forward to getting some idea from others,specially fromm Sir s2000 magician.
Thanks in advance.