Which Section of the Statement of Cash Flows May Be

question 114

Multiple Choice

Which section of the statement of cash flows may be prepared using either the direct method or the indirect method?

• A) Operating activities
• B) Investing activities
• C) Financing activities
• D) All of these answers are correct.

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Definitions:

Discount Rate

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows or to discount a future investment.

Risk Class

Categories of assets or investments grouped together based on the level of risk and return characteristics they possess.

Cost of Equity

The theoretical disbursement a firm makes to its equity stakeholders as remuneration for the risk they bear by putting their capital into the business.

Dividend Growth Model

A valuation model that estimates the price of a company's stock based on the expected dividends and their growth rate.