Which One of the Following Statements Best Describes the Total

question 65

Multiple Choice

Which one of the following statements best describes the total capital requirement for most profitable firms?

• A) The general trend in the total capital requirement is downward sloping.
• B) The total capital requirement tends to be constant over long periods of time.
• C) There are seasonal fluctuations around the total capital requirement trend.
• D) The total capital requirement must be funded with short-term debt.

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Definitions:

Voting Common Stock

A type of equity security that grants its holders the right to vote on corporate policies and the election of the board of directors.

Consolidation Accounting

A method of accounting in which the financial statements of a parent company and its subsidiaries are combined to present a single economic entity.

Common Stock

A type of equity security that represents ownership in a corporation, with rights to vote and share in profits through dividends.

Voting Stock

Shares of a company that grant the holder the right to vote on company matters, such as electing the board of directors.