On the Statement of Cash Flows, Which of the Following

question 134

Multiple Choice

On the statement of cash flows, which of the following sections includes borrowing money and paying off loans?

• A)Investing section
• B)Financing section
• C)Operating section
• D)None of the above

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Definitions:

Financial Leverage

The degree to which a company uses fixed-income securities such as debt and preferred equity in its capital structure.

Tax-Deductible Interest

Interest on loans that can be subtracted from one's taxable income, thereby reducing the overall tax liability.

Earnings Per Share

A company's net profit divided by the number of its outstanding shares, indicating the profitability on a per-share basis.

Cost Of Debt

The effective rate that a company pays on its total debt, acting as a measure of the risk and cost of borrowing capital.