A Financial Plan Is Another Name for a Budget

question 105

True/False

A financial plan is another name for a budget.

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Definitions:

Capital Structure

Capital structure refers to the mix of equity, debt, and other financing sources a company uses to fund its operations and growth.

Optimal Capital Structure

The best combination of debt, preferred, and equity financing that maximizes a company’s stock price by minimizing its cost of capital.

Capital Budget

The budget allocated for spending on major long-term investments or projects of a company.

Net Income

The total earnings of a company after subtracting all expenses, including taxes and operational costs, from its revenues.