Indicate Whether the Following Actions Would (+) Increase, (?) Decrease

question 114

Essay

Indicate whether the following actions would (+) increase, (?) decrease, or (0) not affect a company's total assets, liabilities, and stockholders' equity.
? $\begin{array}{lrr}&\text { Assets}&\text { Liabilities }&\text { Stockholders' Equity }\\ \text { (1) Declaring a cash dividend} &\\ \text {(2) Paying the cash dividend declared in (1) } &\\ \text {(3) Declaring a stock dividend } &\\ \text {(4) Issuing stock certificates for the stock } &\\ \text { dividend declared in (3) } &\\\end{array}$

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Definitions:

Note Issuance Facility (NIF)

Large borrowers issue notes up to one year in maturity in the Euromarket. Banks underwrite or sell notes.

Forward Exchange Rate

An agreed-upon exchange rate for currencies to be exchanged on a predetermined future date, used to hedge against currency market fluctuations.

Interest Rate Parity (IRP)

The condition stating that the interest rate differential between two countries is equal to the difference between the forward exchange rate and the spot exchange rate.

Net Present Value

The difference between the present value of cash inflows and outflows over a period of time; used in capital budgeting to analyze the profitability of a projected investment or project.