Which of the following, if true, weakens the case for Munschausen’s se

QUESTION

Which of the following, if true, weakens the case for Munschausen’s seeking to acquire capital by equity financing?

A) The equity capital market in Europe is currently very strong.
B) Equity financiers expect a consistent return on their investments.
C) Many of the companies in Germany get financing from equity capital.
D) Only the largest companies are listed on Germany’s public stock exchange.
E) Most of the companies in Germany are listed on its stock exchange.

ANSWER

Answer: D
Explanation: D) This means that Munschausen would not be able to get capital through its stock, and it also decreases the chances that it would be able to get investment capital by other means. Choices A, C, and E strengthen the case that Munschausen could acquire capital by equity financing. Choice B weakens the case only if Munschausen could not provide a consistent return on investments.