Higher Cash Flow and Greater Risk

question 30

Multiple Choice

Higher cash flow and greater risk

• A) have no effect on share price.
• B) have an inverse effect on share price.
• C) adversely affect share price.
• D) have the same effect on share price.

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Definitions:

Limited Liability

Status that specifies that an individual’s liability will not go beyond his or her original investment.

Personally Liable

The responsibility of an individual to pay a debt or fulfill an obligation from their own assets, not just the assets of a business or an entity they represent.

Capital Investment

Funds invested in a business venture with the expectation of generating income or profit.

Close Corporation

A corporation whose shares of stock and managerial control are closely held by fewer than 50 shareholders (often members of the same family) or by one person.