The Law of Conservation of Value Implies That

question 19

Multiple Choice

The law of conservation of value implies that
I.the mix of common stock and preferred stock does not affect the value of the firm;
II.the mix of long-term and short-term debt does not affect the value of the firm;
III.the mix of secured and unsecured debt does not affect the value of the firm

• A)I only
• B)II only
• C)III only
• D)I, II, and III

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Definitions:

Proton

One of the three principal parts of an atom. The proton has a positive charge.

Ionization Potential

The amount of voltage or potential that must be applied to cause ionization of a gas.

Atmospheric Pressure

The pressure exerted by the weight of the atmosphere at any given point, usually measured in millibars (mb) or atmospheres (atm).

Voltage

An electrical measurement of potential difference, electrical pressure, or electromotive force (EMF).