Which One of These Statements Is Correct

question 75

Multiple Choice

Which one of these statements is correct?

• A)There is no condition known to date whereby a corporation can increase firm value through the use of leverage.
• B)Corporations generally pay a lower cost on debt than do individuals due to their vast pool of liquid assets.
• C)If individuals pay a higher cost to borrow than corporations do,then corporations can increase firm value by borrowing.
• D)Margin accounts tend to be high interest rate sources of funds for individuals.
• E)Corporations can increase firm value by borrowing provided their interest rate on debt exceeds that paid by individuals.

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Definitions:

Not Completely Finished

Pertains to products or goods that have commenced production but have not yet reached their final form or required specifications for sale or use.

Merchandiser

A business or person engaged in the selling of goods to consumers, typically in the retail industry.

Products in Process

Items undergoing production but not yet complete, a rephrased term for work in process inventory.