The Options for Allocating a Diversified Company's Financial Resources Include

question 152

Multiple Choice

The options for allocating a diversified company's financial resources include:

• A) making acquisitions to establish positions in new businesses or to complement existing businesses.
• B) investing in ways to strengthen or grow existing businesses.
• C) funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses.
• D) paying off existing debt,increasing dividends,building cash reserves,or repurchasing shares of the company's stock.
• E) All of these.

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Definitions:

Cash Flows

The aggregate volume of funds moving into and out of a corporation, impacting its ability to cover short-term obligations.

Income Statement

A financial statement that shows the company's revenues and expenses over a specific period, indicating how the revenues are transformed into net income or loss.

Net Income

The total profit of a company after all expenses, including taxes, have been deducted from total revenue.

Common Stock

Common stock represents ownership shares in a corporation, entitling holders to vote on company matters and potentially receive dividends.