Mike's Mopeds Used Internal Financing as a Source of Long-Term

question 18

Multiple Choice

Mike's Mopeds used internal financing as a source of long-term financing for 70% of its total needs in 2013.The company borrowed an additional 20% of its total needs in the long-term debt markets in 2013.What were Calhoun's net new stock issues,in percentage terms,for 2013?

• A)-10%
• B)-5%
• C)5%
• D)10%
• E)15%

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Definitions:

Par Value

The face value of a bond or stock as stated on the certificate or instrument, which does not necessarily reflect its market value.

Fair Value

The proceeds from divesting an asset or the expense for reallocating a liability in a conventional transaction between market stakeholders at the calculation date.

Investment Account

An account held at a financial institution that is used to buy and hold various investment securities, such as stocks and bonds.

Corporate Existence

The state of being recognized as a separate entity with legal rights and obligations, typically achieved through incorporation.