Earnings Are Considered to Be of Lower Quality If

question 25

Multiple Choice

Earnings are considered to be of lower quality if

• A)cash flow from operating activities is greater than net earnings.
• B)cash flow from financing activities is less than net earnings.
• C)cash flow from operating activities is less than net earnings.
• D)cash flow from investing activities is less than net earnings.

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Definitions:

Bond Prices

The monetary amount at which a bond is traded, influenced by interest rates, credit ratings, and the bond's maturity.

Yield-to-maturity

The total return anticipated on a bond if the bond is held until it matures, accounting for interest payments and the difference between the purchase price and the par value.

Market Value

The trading price at which an asset or service can be currently bought or sold in the open market.

Coupon Rate

The interest rate stated on a bond at the issuance time, which the issuer promises to pay to the bondholder on the face value of the bond.