Which One of These Statements Is Correct

question 66

Multiple Choice

Which one of these statements is correct?

• A)Long-term debt is the residual difference between assets and liabilities.
• B)Net income that is not paid out in dividends decreases retained earnings.
• C)Long-term debt requires a payout of cash within a stated time period.
• D)Stockholders' equity is stated at market value on the balance sheet.
• E)Stockholders' equity increases as the liquidity of a firm increases.

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Definitions:

Human Capital

The economic value of an individual's skills, knowledge, and experience, considered in terms of the ability to perform labor to produce economic value.

Economic Cost

The total cost of choosing one action over another, including both explicit and implicit costs.

Market Rate of Interest

The prevailing interest rate available in the marketplace on loans, determined by the supply of and demand for funds.