Which of the Following Is Not One of the Eight

question 97

Multiple Choice

Which of the following is not one of the eight basic puzzles about financial structure?

• A) Stocks are the most important source of finance for Canadian businesses.
• B) Issuing marketable securities is not the primary way businesses finance their operations.
• C) Indirect finance, which involves the activities of financial intermediaries, is many times more important than direct finance, in which businesses raise funds directly from lenders in financial markets.
• D) Banks are the most important source of external funds to finance businesses.

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Definitions:

Selling Price

The cost at which a service or item is sold to purchasers.

Required Rate of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.

Dividend Growth Rate

The annualized percentage rate of growth of a company's dividends paid to shareholders, indicating the company’s financial health and profitability.