Which of These Is the Financing Decision

question 15

Multiple Choice

Which of these is the financing decision?

• A)The form in which returns generated by the firm are passed on to equity holders
• B)The mix of funding obtained from capital markets,in terms of proportional holdings of equity and liabilities
• C)The level of directors remuneration
• D)The manner in which funds raised in the capital markets are employed in productive activities

Understand the concept of interest rates and how compounding affects the effective rate of interest.

Identify different types of loans and their characteristics.

Recognize the importance of loan security and the role of collateral.

Explain the process and benefits of obtaining loans through the Small Business Administration (SBA).

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Definitions:

Common Stock

Common stock is a form of corporate equity ownership, a type of security representing an ownership interest in a corporation.

Par

The face value of a bond or the stock value stated on the certificate, unrelated to its market value.

State Charter

A legal document issued by a state that grants rights, privileges, and operating terms to a corporation.

Authorized Stock

This refers to the maximum number of shares that a corporation is legally permitted to issue, as specified in its articles of incorporation.