Which of the Following Factors Might Suggest That a Company

question 137

Multiple Choice

Which of the following factors might suggest that a company is having difficulty selling its inventory?

• A) An increase in receivables
• B) A buildup of inventory balances
• C) An increase in total debt
• D) An increase in interest expense

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Definitions:

Per Share FCFE

Free Cash Flow to Equity (FCFE) calculated on a per-share basis, indicating the amount of cash available to shareholders per share.

Required Return

The minimum expected return by investors for investing in a risky asset, considering the risk level compared to the risk-free rate.

Per Share FCFE

Free Cash Flow to Equity per share, which indicates how much cash is available to the equity shareholders of a company after all expenses and reinvestments.

Required Return

The minimum expected return an investor demands for investing in a particular asset, considering its risk.