When a Company's Financial Instruments Are Perceived to Be of Low

question 3

True/False

When a company's financial instruments are perceived to be of low quality,there is a cost to the company in the form of lower proceeds from issuing stock or higher interest rates when it borrows funds.

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Definitions:

Quick Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets, excluding inventory.

Accounts Receivable

Accounts receivable are amounts owed to a business by its customers for goods or services delivered but not yet paid for.

Inventories

Items such as goods or merchandise held by a company, intended for sale or production.

Debt Ratio

A financial ratio that measures the extent of a company's leverage, calculated by dividing its total liabilities by its total assets.