1) Ideally, permanent current assets should be financed exclusively with short-term
borrowings.
2) According to the expectations hypothesis, the expected value is the sum of the
probabilities of all expected events.
3) The income statement is the major device for measuring the profitability of a firm
over a period of time.
4) A rapid growth firm can often expect a shift in the type of its typical stockholder as
the firm moves into maturity.
5) A firm that does not earn the cost of capital in the long run will not maximize
shareholder wealth.
6) Generally, because of the unpredictability of earnings, cyclical stocks are given
higher price-earnings multiples than growth stocks.
7) A term loan is less risky to the bank, thus they provide a fixed rate to the customer.
8) Capital markets refer to those markets dealing with short-term securities that have a
life of one year or less.
9) There is no guarantee that any currency will stay strong relative to other currencies,
but the dollar is an exception.
10) The stock market’s reaction to divestitures may actually be positive if the divestiture
is perceived to rid the company of an unprofitable business, or if it seems to sharpen the
company’s focus.
11) The use of point-of-sale terminals has made it easier for many retail store managers
to manage their inventory.