Friendly Finance Loans Anne $10,000 and She Will Pay $13,130

question 124

True/False

Friendly Finance loans Anne $10,000 and she will pay $13,130 at he end of three years. Since Friendly is on a cash basis, it will recognize the $3,130 interest income when the loan is repaid.

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Definitions:

Retained Earnings

Profits that a company chooses to keep for reinvestment in its operations rather than distributing to shareholders as dividends.

Floatation Costs

Expenses incurred by a company during the process of issuing new securities, including legal, accounting, and underwriting fees.

Common Stock

Common Stock is a type of equity ownership in a corporation, entitling holders to vote on corporate matters and receive dividends.

Dividend Growth

The increase in the amount of the dividend payments issued by a company over time, indicating the company's growth and stability.