Which of the Following Statements Is CORRECT

question 37

Multiple Choice

Which of the following statements is CORRECT?

• A) If a firm's assets are growing at a positive rate, but its retained earnings are not increasing, then it would be impossible for the firm's AFN to be negative.
• B) If a firm increases its dividend payout ratio in anticipation of higher earnings, but sales and earnings actually decrease, then the firm's actual AFN must, mathematically, exceed the previously calculated AFN.
• C) Higher sales usually require higher asset levels, and this leads to what we call AFN.However, the AFN will be zero if the firm chooses to retain all of its profits, i.e., to have a zero dividend payout ratio.
• D) Dividend policy does not affect the requirement for external funds based on the AFN equation.
• E) The sustainable growth rate is the maximum achievable growth rate without the firm having to raise external funds.In other words, it is the growth rate at which the firm's AFN equals zero.

Understand the specifics and legal implications of the Truth in Lending Act (TILA) including disclosure requirements and debtor protections.

Recognize the role and creation of the Consumer Financial Protection Bureau (CFPB) and its regulations.

Identify key elements and protections under the Fair Credit Billing Act and the Fair and Accurate Credit Transactions Act.

Analyze the implications of false advertising, deceptive practices, and the legal doctrine surrounding these issues.

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Definitions:

Economic Aid

Economic aid is assistance given by one country or international organization to another in forms such as grants, loans, or credits to support the receiving country's economy.

Military Alliances

Formal agreements between nations to support each other militarily in the event of war or conflict.

Peace Corps

An agency of the United States government that sends American volunteers abroad to work on projects related to education, health, and economic development in developing countries.

Hydrogen Bomb

A highly destructive nuclear weapon that uses fusion of hydrogen isotopes to release massive amounts of energy, significantly more powerful than an atomic bomb.