Which of the Following Statements Is FALSE

question 38

Multiple Choice

Which of the following statements is FALSE?

• A)If a company anticipates an ongoing surplus of cash,it may choose to increase its dividend payout.
• B)Seasonal sales can create large short-term cash flow deficits and surpluses.
• C)The first step in short-term financial planning is to forecast the company's future net working capital.
• D)Deficits resulting from investments in long-term projects are often financed using long-term sources of capital,such as equity or long-term bonds.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities and preferred stock, reported on the balance sheet.

Legal Asset Distributions

The process of dividing and distributing a company's assets to shareholders, creditors, or heirs following legal rules.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, hence are not considered when calculating earnings per share or dividends.

Earnings Per Share

A financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.