Which of the Following Factors Would Be Indicative of a High

question 75

Multiple Choice

Which of the following factors would be indicative of a high quality balance sheet?

• A) Book value is greater than market value.
• B) The presence of off-balance sheet liabilities
• C) Market value is greater than book value.
• D) Very little unused borrowing capacity.
• E) None of the above.

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Definitions:

Contributed Capital

Funds raised by a company in exchange for its shares, representing the equity capital contributed by the shareholders.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given period, and must be paid out before common shareholders can receive dividends.

Noncumulative Preferred Stock

A type of preferred stock where dividends are not accumulated if they are not declared.