Which One of the Following Statements Is Most Likely Correct

question 2

Multiple Choice

Which one of the following statements is most likely correct for a firm with an average collection period of 90 days?

• A)its average daily sales are low.
• B)its average daily sales are high.
• C)its current ratio will be high.
• D)it is providing financing for approximately 25% of its annual sales.

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Definitions:

Expected Return

The anticipated profit or loss from an investment over a specified period, factoring in all possible scenarios.

Expected Dividend Yield

An estimation of the dividend earnings on a stock investment, expressed as a percentage of the stock price.

Expected Dividend

The forecasted amount of dividend payments that an investor anticipates receiving from investments in stocks.

Tracking Stock

A type of stock issued by a parent company that tracks the financial performance of a particular division or subsidiary without conferring ownership.