If Interest Rates Decline, a Firm Should Consider ____ to Take

question 15

Multiple Choice

If interest rates decline, a firm should consider ____ to take advantage of the lower interest rates.

• A) selling fixed assets
• B) stock sales
• C) bond refunding
• D) investing in marketable securities

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Definitions:

Joint Stock Company

A type of business entity owned by shareholders where the stock can be bought and sold on stock exchanges.

Perpetual Existence

A corporate structure characteristic where a company continues indefinitely, unless dissolved, regardless of changes in ownership or management.

Implied Duration

Estimated time that represents how long it takes for the price of a fixed-income investment to be repaid by its internal cash flows.

Business Trust

A legal arrangement where assets are managed by trustees for the benefit of the trust's beneficiaries, often used in business for tax and estate planning.