According to the Precautionary Motive,businesses Hold Liquid Assets Because

question 14

Multiple Choice

According to the precautionary motive,businesses hold liquid assets because:

• A)cash inflows and outflows are not perfectly matched in both timing and amount.
• B)there is always the possibility that extra cash will be needed to meet unexpected costs.
• C)the opportunity to make profitable investments is anticipated.
• D)there is a possibility of bankruptcy.

Calculate the price of a stock with varying dividend growth rates.

Determine the price of a stock based on its expected future dividends and sale price.

Apply the dividend discount model for constant and varying growth rates to estimate stock prices.

Calculate the Net Present Value of Growth Opportunities (NPVGO).

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Definitions:

US

United States, a country primarily located in North America comprising 50 states and a federal district.

Classical Conditioning Experiment

A research method used in behavioral psychology to study the association between a naturally occurring stimulus and a previously neutral stimulus.

CS

An abbreviation for conditioned stimulus, which in classical conditioning is a previously neutral stimulus that, after association with an unconditioned stimulus, comes to trigger a conditioned response.

US

Refers to the United States, a country located primarily in North America.