Which of the Following Is Correct

question 123

Multiple Choice

Which of the following is correct?

• A)Joan takes some of her income and buys mutual fund shares.Joan's purchase will be included in the investment category of GDP.
• B)If a share of stock in Virtual Pizza Corporation sells for $77,the earnings per share are $5,and the dividend per share is $2,then the P/E ratio is 11.
• C)In order to use equity finance,a firm must sell about equal values of stocks and bonds.
• D)None of the above is correct.

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Definitions:

Straight-Line Method

Depreciation method in which periodic depreciation is the same for each year of the asset’s useful life.

Cash Inflow

The total amount of money being transferred into a business, from operations, investments, or financing activities, within a specific period.

Cash Payback Period

The period of time it takes for a company to recoup an investment exclusively through cash flows.

Depreciation Expense

The allocation of the cost of a tangible asset over its expected useful life to account for its decline in value.