When a Firm Finances Long-Term Assets with Short-Term Sources of Funding,it

question 57

Multiple Choice

When a firm finances long-term assets with short-term sources of funding,it:

• A) reduces the risk of cash shortage.
• B) will generally have lower interest expense.
• C) improves the leverage ratio.
• D) violates the principle of matched maturities.

Calculate and interpret turnover ratios for mutual funds to evaluate trading activity.

Understand corporate share capital transactions and their impact on financial statements.

Comprehend the accounting treatments and reporting requirements for share issues, reissues, and buy-backs in accordance with AASB standards.

Interpret the effects of dividends, both declared and paid, on a company’s financial position and performance.

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Definitions:

Menarche

The first menstrual cycle, or first menstrual bleeding, in female humans.

Adolescent Growth Spurt

A rapid increase in height and weight during puberty due to accelerated bone growth and hormonal changes.

Menopause

The natural decline in reproductive hormones when a woman reaches her 40s or 50s, marking the end of the menstrual cycle and fertility.

Menstruation

The monthly shedding of the uterine lining in females when there is no pregnancy, typically referred to as a menstrual period.