Activities That Affect Long-Term Liabilities and Stockholders' Equity Are

question 29

Multiple Choice

Activities that affect long-term liabilities and stockholders' equity are:

• A)investing activities.
• B)operating activities.
• C)financing activities.
• D)noncash investing and financing activities.

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Definitions:

Perpetuity

An annuity that pays a constant stream of cash flows indefinitely.

Duration

An indicator of how a bond or debt security's price is affected by interest rate fluctuations, usually stated in terms of years.

Yield

The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or current market value.

Convexity

A gauge of how changes in interest rates affect the relationship between the price of bonds and their yields, showing alterations in the bond's duration.