Identify Each of the Following Business Activities 1 Through 6

question 20

Short Answer

Identify each of the following business activities 1 through 6 into the appropriate category a,b,and c.
a.Operating
b.Investing
c.Financing
____ 1.Paid utilities expenses.
____ 2.Withdrawal of funds by owners.
____ 3.Purchase of land.
____ 4.Sale of used equipment.
____ 5.Borrowed money from a bank on a long-term note.
____ 6.Paid employee wages.

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Definitions:

Fama and French

Two renowned economists who developed the three-factor model explaining stock returns on the basis of market risk, size, and value.

Dividend-Discount Model

A method for determining the value of a stock by using predicted dividends and discounting them back to present value.

Mehra and Prescott

Two economists known for their work in the economics field, particularly for the Equity Premium Puzzle which questions why stocks have historically outperformed safer assets by such a wide margin.

Average Excess Returns

The average return on an investment above the benchmark or risk-free rate.