Which of the Following Statements Is Correct

question 32

Multiple Choice

Which of the following statements is correct?

• A)Because the process of planning involves long periods of time, only long-term considerations are involved.
• B)Financial planning is built upon the assumption of the target capital structure being made.
• C)If total assets increase by the same percentage as sales increase, then assets and sales will increase by same dollar amounts.
• D)Financial planning models always include the three basic elements of firm value: cash flow size, risk, and timing.

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Definitions:

Maturity Date

is the specified date on which the final payment of a loan, bond, or other financial instrument is due to be paid.

Face Value

The nominal or dollar value printed on a financial instrument, such as a bond or stock certificate.

Bond Certificate

A physical document representing the investor's right to receive the principal and interest from a bond issuer.

Semiannual Interest

Interest that is calculated and paid twice a year, often on a bond or loan.