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?

---

Definitions:

Positive Expectations

The anticipation or belief that one will experience positive outcomes in the future.

Placebo Effects

Positive changes in a patient's condition following a treatment that has no therapeutic effect, due to the patient's belief in the treatment.

Double-blind Procedure

An experimental method where neither the participants nor the experimenters know who is receiving a particular treatment.

Social Interaction

The process by which individuals act and react in relation to others, shaping society through their collective and individual behaviors.