In Regards to the Fact That the Pricing of Stocks

question 28

Multiple Choice

In regards to the fact that the pricing of stocks is more difficult than the pricing of bonds,which of the below statements is FALSE?

• A)Cash dividends,unlike coupons for bonds,typically change from year to year.
• B)The ending price of the stock at any point in time is not fixed like the par value of the principal.
• C)Because a stock has no maturity date,the number of its payments are unknown.
• D)A stock's final sale is fixed in time on its maturity date.

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Definitions:

Cash Basis

An accounting method where revenues and expenses are recorded only when cash is received or paid, regardless of when the transactions occurred.

Cost Of Goods Sold

Expenses directly related to the creation of products a company sells, encompassing both material and labor costs.

Special Journals

Accounting journals designed for recording a particular type of transaction in a more efficient manner.

Cash Payments Journal

A specialized accounting journal used to record all cash outlays of a business, including expenses, asset purchases, and debt payments.