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1) If an individual's cost of capital were 6%, the person would prefer to receive $110 at
the end of one year rather than $100 right now.
2) The faster a firm's growth in sales, the more likely it is that an increasing percentage
of financing will be internally generated.
3) The out-of-pocket cost to issue new common stock is always paid by the investment
banker.
4) Refunding a bond occurs when the company sells more bonds of the same series with
maturity and a coupon equal to the bonds sold earlier.
5) In Stage II of a firm's life cycle, expansion continues, but at a decreasing rate.
6) A forward exchange rate can be used to help establish the value of a currency at a
future point in time.
