Shield Company Needs to Purchase a Property to Build Their

question 73

Multiple Choice

Shield Company needs to purchase a property to build their headquarters.An investor is willing to exchange land worth $700,000 for shares of common stock.On the statement of cash flows,this transaction would be shown as ________.

• A)investing activities
• B)non-cash investing and financing activities
• C)operating activities
• D)financing activities

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Definitions:

Call Option

A finance-related contract granting the buyer the privilege, rather than a requirement, to buy an asset at a fixed price within a set period.

Risk-Free Bond

A debt security that is assumed to have no risk of default, typically issued by a government with a stable financial outlook, allowing investors to predict with a high degree of confidence their return on investment.

Maturity Date

The date on which a financial obligation or investment becomes due for payment.