All of the Following Are Likely to Result in the Use

question 36

Multiple Choice

All of the following are likely to result in the use of less debt in a company's capital structure EXCEPT

• A) desire to maintain financial flexibility.
• B) desire to maintain a high credit rating.
• C) insufficient internal funds.
• D) a decrease in a company's marginal tax rate.

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Definitions:

Stop-payment Order

A request made to a bank by an account holder to not pay a check that has been issued or to halt a payment that has been preauthorized.

Holder In Due Course

A term relating to negotiable instruments, denoting a party that has received an instrument in good faith, for value, and without notice of any defects or claims against it.

Intermediary Banks

Financial institutions that serve as a middleman between the payer and the payee in transactions, particularly in international wire transfers.

Payment Orders

Instructions to transfer money from one bank account to another, often used in international trade and electronic funds transfers.