Calhoun Computech Used Internal Financing as a Source of Long-Term

question 23

Multiple Choice

Calhoun Computech used internal financing as a source of long-term financing for 80% of its total needs in 2013.The company borrowed an additional 15% 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:

Useful Life

The period during which an asset is expected to be usable for its intended purpose, important for depreciation calculations.

Commercial Substance

A situation where the future cash flows of an asset or business operation are expected to change significantly as a result of a transaction.

Fair Value

An estimate of the market value of an asset or liability, based on current prices in an active market.

Book Value

The net value of a company's assets found on its balance sheet, which is calculated by subtracting liabilities from the total value of assets.