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Certainty equivalents adjust an investment’s cash outflows in terms of a risk-free return.​

Regression analysis assumes that inventory as a percent of sales is constant.​

When cash is deposited in a checking account, the reserves of commercial banks are increased.​

The sum of a firm’s liabilities and equity equals the sum of its assets.​

Debt financing is more risky for firms than preferred stock financing because

When cash is deposited in a checking account, the reserves of commercial banks are increased.​

If a firm must issue subordinated debentures instead of equipment trust certificates, the marginal cost of capital may rise even though the optimal capital structure is maintained.

The cost of equity​ 1. is less than the cost of debt2. is greater than the cost of debt3. depends on the riskiness of the firm4. depends on the firm’s current ratio

According to accountants, assets should be recorded at

A constant payout ratio implies dividends vary with earnings.​