How Does the Text Distinguish Between Firm's Financial Structure and Its

question 29

Multiple Choice

How does the text distinguish between firm's financial structure and its capital structure?

• A) Financial structure includes only interest bearing debt
• B) Capital structure includes only non-interest bearing debt
• C) Financial structure uses market values of equity
• D) Capital structure includes only interest bearing debt

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Definitions:

Insurable Interest

A principle requiring that a person purchasing insurance has a vested interest in the item or life being insured.

Double Chocolate Bars

Confectionery items that incorporate chocolate in at least two forms, such as chocolate coating and chocolate filling.

Confection Corporation

A business entity specialized in the production and sale of sweets and chocolates.

Perfect Tender Rule

A common law rule under which a seller was required to deliver to the buyer goods that conformed perfectly to the requirements stipulated in the sales contract. A tender of nonconforming goods would automatically constitute a breach of contract. Under the Uniform Commercial Code, the rule has been greatly modified.