Which of the Following Statements Is Generally Incorrect from an Investor's

question 38

Multiple Choice

Which of the following statements is generally incorrect from an investor's perspective?

• A) A 1:1 current ratio is generally preferred over a 1.5:1 current ratio.
• B) A 20-day average collection period for accounts receivable is generally preferred over a 30-day average collection period.
• C) A 5% dividend yield is generally preferred over a 3% dividend yield.
• D) A 10% net margin is generally preferred over an 8% net margin.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuer, which may differ from its market value.

Offering Price

The initial price at which a company's shares are made available to the public during an Initial Public Offering (IPO).