Bankston Corporation Forecasts That If All of Its Existing Financial

question 60

Multiple Choice

Bankston Corporation forecasts that if all of its existing financial policies are followed,its proposed capital budget would be so large that it would have to issue new common stock.Since new stock has a higher cost than retained earnings,Bankston would like to avoid issuing new stock.Which of the following actions would REDUCE its need to issue new common stock?

• A) Increase the dividend payout ratio for the upcoming year.
• B) Increase the percentage of debt in the target capital structure.
• C) Increase the proposed capital budget.
• D) Reduce the amount of short-term bank debt in order to increase the current ratio.
• E) Reduce the percentage of debt in the target capital structure.

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Definitions:

Thin Clients

Computing devices that rely on a connection to remote servers for data processing and storage, offering a lightweight, cost-effective alternative to traditional personal computers.

Extranets

Private networks that extend and provide limited access to a company's information to external partners, suppliers, or clients through the internet.

Intranets

Private networks accessible only to an organization's staff, often used to store, share, and manage internal information.

Transport Layer

Constitutes the fourth layer of the OSI model, responsible for delivering data across network connections with proper sequencing and error control.