Which of the Following Key Financial Decisions Depends Upon the Capital

question 55

Multiple Choice

Which of the following key financial decisions depends upon the capital budgeting process of a particular firm?

• A) How much capital must the company raise each year?
• B) How much of the needed capital must be raised externally rather than through retained earnings?
• C) How much of the external funding should be raised through borrowing from a bank or another financial intermediary,and how much capital should be raised by selling securities directly to investors?
• D) What proportion of the external funding should be structured as common stock,preferred stock or long-term debt?

Analyze the effects of transactions on cash flows.

Compute cash payments and receipts related to operating activities.

Determine the impact of changes in current asset and liability accounts on cash flows.

Explain the significance and calculation of free cash flow.

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