Issuing ________ Increases a Firm's Debt and May Adversely Affect

question 305

Multiple Choice

Issuing ________ increases a firm's debt and may adversely affect the financial community's perception of the firm.

• A) common stock
• B) bonds
• C) preferred stock
• D) retained earnings

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Definitions:

Corporate Fraud

It involves illegal activities undertaken by an individual or company in a deceitful manner, typically to gain a financial advantage.

Sarbanes-Oxley Act

U.S. legislation enacted in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations, increasing transparency and accountability in corporate governance.

Unlawful Conduct

Actions or behaviors that are illegal or prohibited by law.

Codes of Conduct

A set of rules outlining the responsibilities and proper practices for an individual or organization.