Which of the Following Would NOT Be Considered a Cost

question 14

Multiple Choice

Which of the following would NOT be considered a cost of debt financing?

• A)The required return on a bank loan
• B)The required return on preferred stock
• C)The yield-to-maturity of a bond issue
• D)The required return on money borrowed from a venture capitalist

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Definitions:

Investing Activities

Financial transactions involving the purchase and sale of long-term assets and other investments not included in cash equivalents.

Cash Flow Statement

A financial statement that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Statement of Cash Flows

This document details the combined amount of cash a business gains from its day-to-day operations and outside investments, and the cash it expends on operating and investing activities over a particular period.

Indirect Method

A method of calculating cash flows from operating activities in the cash flow statement by adjusting net income for changes in non-cash accounts.