8.7 Review Questions: Chapter Eight

Review Questions: Chapter Eight

  1. State the difference between Vertical- and Horizontal-Capital Structure Theories.
  2. How are Temporary- and Permanent-Working Capital different from one another? What is the distinguishing criterion?
  3. In words, explain the Matching Principle.
  4. Why would an aggressive manager mismatch his/her firm’s horizontal capital position? In what manner would s/he do so?
  5. Provide some examples of both Internal and External Funds.



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