Which of the Following Statements Is True

question 214

Multiple Choice

Which of the following statements is true?

• A) Economists and financial analysts agree that mergers are good for the economy.
• B) Takeovers always increase a firm's productivity.
• C) Mergers in the first part of the twenty-first century will see an increase in debt financing.
• D) Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.
• E) There will be fewer mergers that involve investors from other countries.

Understand the effects of stock dividends on market price, equity, and the number of shares outstanding.

Grasp the accounting treatment and rationale behind stock splits.

Comprehend the capitalization of retained earnings for both small and large stock dividends.

Understand the various types of preferred stock and their features regarding dividends.

---

Definitions:

Long-Term Projects

Ventures or initiatives with a timeline extending over several years, typically requiring substantial capital investment and planning.

Short-Term Financing

Borrowing options intended for a short period, typically less than a year, to cover immediate needs.

Matching Principle

An accounting concept stating that expenses should be matched with the revenues they help to generate, ensuring accurate financial reporting.

Working Capital

The difference between a company’s current assets and current liabilities, showing its short-term financial health and operational efficiency.