A Shareholder Is Interested in the Ability of a Firm

question 9

Multiple Choice

A shareholder is interested in the ability of a firm to

• A) pay consistent dividends.
• B) appreciate in share price.
• C) survive over a long period.
• D) all of these.

---

Definitions:

Amortization

The process of gradually paying off a debt over a period of time through planned, periodic payments of principal and interest.

Bond Discount

The difference between the face value of a bond and the price for which it is sold, when the bond is sold for less than its face value.

Operating Activities

Operating activities relate to the primary, day-to-day activities of a business such as selling products, manufacturing, and expenses related to administration.

Net Income

The total profit of a company after all expenses and taxes have been deducted from total revenue.