Debt in the Capital Structure Could Be Treated as If

question 100

Multiple Choice

Debt in the capital structure could be treated as if it were common equity in computing the weighted average cost of capital if the debt were

• A)callable.
• B)participating.
• C)cumulative.
• D)convertible.

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Definitions:

Aging

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding.

Accounts Receivable

Unpaid customer debts to a company for goods or services that have been supplied.

Bad Debts Expense

An expense reported on the income statement reflecting the cost of estimated uncollectible accounts receivable.

Net Credit Sales

Sales made on credit minus any sales returns or allowances, reflecting the actual credit sales revenue.