Bankston Corporation Forecasts That If All of Its Existing Financial

question 75

Multiple Choice

Bankston Corporation forecasts that if all of its existing financial policies are adhered to,its proposed capital budget would be so large that it would have to issue new common stock.Since new stock has a higher cost than retained earnings,Bankston would like to avoid issuing new stock.Which action would reduce its need to issue new common stock?

• A)increasing the percentage of debt in the target capital structure
• B)increasing the dividend payout ratio for the upcoming year
• C)increasing the proposed capital budget
• D)reducing the amount of short-term bank debt in order to increase the current ratio

---

Definitions:

Win-lose Competition

A competitive scenario where one party's gain is directly correlated with the other's loss, emphasizing the zero-sum nature of some competitions.

Collaboration

The action of working with someone to produce or create something, especially in a learning or professional context.

Cooperative

An entity or organization owned and operated for the mutual benefit of its members, sharing profits or benefits among participants.

Assertiveness

A communication style in which individuals express their thoughts and feelings in a direct, honest, and respectful way.