QUESTION:

A useful acronym when considering the finance decision is PARTS. This stands for

A. P: PaymentA: AmountR: RepaymentT: TermS: Security

B. P: PurposeA: AmountR: RepaymentT: TermS: Security

C. P: PurposeA: AmortisationR: RepaymentT: TermS: Security

D. P: PurposeA: AmountR: RefundT: TermS: Security

E. P: PurposeA: AmountR: RepaymentT: Time valueS: Security

P: PurposeA: AmountR: RepaymentT: TermS: Structure

QUESTION:

Which of the following is NOT true when considering the Optimal capital structure in the Traditional World

A. There is no optimal capital structure in the Traditional World

B. It can be assumed that a company is correctly structured at the target D:E ratio at market value

C. It is acceptable to have an over or under-utilisation of debt at any point in time as long as the company has set its sights on the long-term target D:E ratio