Which Statement Is Correct

question 87

Multiple Choice

Which statement is correct?

• A)A simple capital structure includes potentially dilutive securities.
• B)A simple capital structure excludes potentially dilutive securities.
• C)EPS applies only to a company with a simple capital structure.
• D)A company with a simple capital structure does not need to calculate EPS.

Differentiate between glocalization, modernization theory, and dependency theory in the context of globalization.

Understand the impact of capital structure on a firm's risk and cost of capital.

Explain the concepts of business risk, financial risk, and their determinants.

Describe the Weighted Average Cost of Capital (WACC) and factors affecting it.

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Definitions:

Allowance Method

An accounting technique used to estimate and account for doubtful debts, reflecting potential future losses on receivables.

Outstanding Accounts Receivable

Refers to the money owed to a company for goods or services that have been provided but not yet paid for.

Allowance for Doubtful Accounts

An estimation of the amount of accounts receivable that may not be collectible, resulting in a contra asset account to adjust the value of total accounts receivable.

Percent of Sales Method

A forecasting technique used to estimate various financial metrics, like expenses or inventory levels, as a percentage of sales revenue.