Which of the Following Statements About a Not-For-Profit Firm's Sources

question 6

Multiple Choice

Which of the following statements about a not-for-profit firm's sources of capital is most correct?

• A) Fund capital is obtained by retaining earnings⎯if all earnings are paid out as dividends, no fund capital is created.
• B) Preferred stock is never used by not-for-profit firms.
• C) Not-for-profit firms are not allowed to raise capital by borrowing.
• D) Not-for-profit firms usually have high dividend payouts.
• E) Since not-for-profit firms are tax exempt, there is no tax advantage to debt capital.

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Definitions:

Breaks In Between

Short periods of rest or interruption in activities to improve focus and productivity.

Routine Expertise

The proficiency gained in performing tasks or activities that are regular and repetitive, leading to efficiency and consistency.

Specific Behaviours

Observable actions or reactions of an individual in particular situations, distinguished by their precision and context.

Similar Settings

Environments or circumstances that share common characteristics or conditions, potentially allowing for comparable observations or experiments.