Using Present Value to Calculate Stock Prices Is ________ Than

question 163

Multiple Choice

Using present value to calculate stock prices is ________ than using present value to calculate bond prices because ________.

• A)less accurate; dividend payments for stocks are known with certainty but coupon payments for bonds are not
• B)less accurate; coupon payments for bonds are known with certainty but dividend payments for stocks are not
• C)more accurate; dividend payments for stocks are known with certainty but coupon payments for bonds are not
• D)more accurate; coupon payments for bonds are known with certainty but dividend payments for stocks are not

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Definitions:

Inventory Controls

Systems and procedures implemented by a company to manage its inventory efficiently and minimize costs.

Merchandise

Goods that are bought and sold by a business in the regular course of its operation.

Adjusted Trial Balance

A statement prepared after adjusting entries are made, used to verify the balance of debits and credits before preparing financial statements.

End-of-period Spreadsheet

A tool used in accounting to gather all the financial data and adjustments needed to prepare financial statements at the end of an accounting period.