Cash Flows Associated with Common Stock Are More Difficult to Estimate

question 32

True/False

cash flows associated with common stock are more difficult to estimate than those related to bonds because stock has a residual claim against the company versus a contractual obligation for a bond.

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Definitions:

Petty Cash Fund

A small amount of cash kept on hand for making immediate, minor expenses in a business.

Custodian

An entity or individual responsible for safeguarding and managing assets or securities, ensuring their safekeeping and proper administration.

Disbursements

Money paid out by a business or organization; expenses or amounts spent.

Petty Cash Fund

A small amount of cash kept on hand for making immediate payments for small, incidental expenses.