Which of the following statements about public offerings is NOT true? A) A public offering is the most common type (vs private) for equity securities. B) Public offerings are usually more expensive than a private placement. C) The issuing process typically completes within one month. D) All of the above are true. ANSWER […]
All else equal, an individual investor would prefer ________ even if rates on both are equal, since ________ can be deferred. A) dividends to capital gains; dividends B) dividends to capital gains; capital gains C) capital gains to dividends; capital gains D) Investors are indifferent to capital gains vs dividends. ANSWER C
Commercial paper is issued in multiples of ________. A) $1,000 or more B) $10,000 or more C) $100,000 or more D) $1,000,000 or more ANSWER C
________ tend to invest locally and recognize the risk of investing in start-ups. A) Venture capitalists B) Angel investors C) Initial public offerings D) Private equity firms ANSWER B
Sizing up human resource management involves: A) identifying the firm’s strengths and weaknesses related to human resource management. B) an external assessment of the industry. C) an internal assessment of the firm’s strengths and weaknesses. D) None of the above. ANSWER D
________ placement of securities restricts the ability to resell the securities, thus investors often require ________ interest rates on bonds issued in this manner. A) Private; lower B) Private; higher C) Public; higher D) Public; identical ANSWER B
The author cites a global study by Servaes and Tufano from 2006 which shows ________ as the dividend policy preferred by the vast majority (76%) of the firms surveyed. A) a specific percentage amount B) a specific target amount C) a specific growth amount D) no specific policy ANSWER B
The base level of EBIT must be held constant to compare the financial leverage associated with different levels of fixed financial costs. Indicate whether the statement is true or false ANSWER TRUE
Financial leverage results from the presence of variable financial costs in a firm’s income stream. Indicate whether the statement is true or false ANSWER FALSE
A ________ is a short-term, unsecured promissory note issued by firms with a high credit standing. These notes are primarily issued by commercial finance companies. A) line of credit B) commercial paper C) revolving line of credit D) T-bill ANSWER B
