Which of the Following Statements Is Most Correct

question 55

Multiple Choice

Which of the following statements is most correct?

• A) Capital components are the types of capital used by firms to raise money. All capital comes from one of three components: long-term debt, preferred stock, and equity.
• B) Preferred stock does not involve any adjustment for flotation cost since the dividend and price are fixed.
• C) The cost of debt used in calculating the WACC is an average of the after-tax cost of new debt and of outstanding debt.
• D) The opportunity cost principle implies that if the firm cannot invest retained earnings and earn at least rs, it should pay these funds to its stockholders and let them invest directly in other assets that do provide this return.
• E) The cost of common stock, rs, is usually less than the cost of preferred stock.

Analyze financial performance using flexible budget reports.

Apply cost and revenue formulas to generate budget reports.

Understand the impact of activity levels on budgeted and actual expenses and revenues.

Grasp the importance of budgeting in non-profit organizations.

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Maintained

The process of keeping something in good condition by checking or repairing it regularly.

Grandparents

The parents of a person's father or mother; elderly individuals who often play a significant role in family structures.

Contact

The act of communicating or connecting with someone, which can be physical, emotional, or virtual.

Grandchildren

The progeny generated by a person's son or daughter.