Which One of These Statements Is Correct

question 62

Multiple Choice

Which one of these statements is correct?

• A) A dollar received next year has the same value as a dollar received today.
• B) Risky cash flows are more valuable than certain cash flows.
• C) Smart investment decisions create more value than smart financing decisions.
• D) Corporate governance is irrelevant.

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Definitions:

Rate of Interest

The percentage of a sum of money charged for its use, typically expressed as an annual percentage.

Equity Financing

The method of raising capital through the sale of shares in a company, thereby granting shareholders ownership interests.

Five C's of Credit

are criteria that lenders use to evaluate the creditworthiness of a borrower: character, capacity, capital, collateral, and conditions.

Debt Financing

A method of raising capital through the borrowing of money, typically involving the issuance of bonds or taking out loans.