1) Life cycle growth analysis can be helpful in determining a firm’s ability to pay
dividends.
2) The term “underwriter” is synonymous with risk-taker or risk-bearer.
3) Higher interest rates (discount rates) reduce the present value of amounts to be
received in the future.
4) “Best efforts” and “direct” methods account for a relatively small portion of
investment banking roles.
5) Some researchers feel that stockholders prefer dividends to retained earnings because
dividends have information content.
6) The longer the maturity of a bond, the greater the impact on price to changes in
market interest rates.
7) Trade credit is usually extended for periods of one year or more.
8) A company can improve their ROE by changing their capital structure.
9) Profits of sole proprietorships are taxed at corporate tax rates.
10) Commercial paper is an unsecured short-term IOU from a large financially secure
company.