Which of the Following Is NOT a Component of a Firm's

question 72

Multiple Choice

Which of the following is NOT a component of a firm's capital structure?

• A) Preferred stock
• B) Bonds
• C) Common stock
• D) Accounts payable
• E) Retained earnings

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Definitions:

Incremental Cost Approach

A method that analyzes the financial information relevant to a decision by focusing on the additional or incremental costs involved.

Discount Rate

The interest rate used in discounted cash flow analysis to calculate the present value of future cash flows.

Salvage Value

The estimated residual value of an asset after it has reached the end of its useful life.

Overhaul Costs

Overhaul costs are the expenses associated with major maintenance or the complete refurbishing of equipment, machinery, or a facility to extend its life and efficiency.