1) A motive for selling stockholders may be the bias against smaller companies.
2) The percent-of-sales provides the most accurate and detailed method of forecasting
necessary funds.
3) Many attribute the banking crisis of 2008-2009 to problems in the futures markets.
4) Under the net present value method, cash flows are assumed to be reinvested at the
firm’s weighted average cost of capital.
5) A tax loss carryforward is a benefit to the acquired firm’s shareholders.
6) All firms within particular industries have similar optimum capital structures.
7) A warrant loses some of its financial leverage when the stock rises far above the
exercise price.
8) The Sarbanes-Oxley Act is primarily intended to increase public scrutiny of private
companies that had previously been exempt from many public disclosure requirements.
9) A limited partnership limits the profits partners may receive.
10) When considering offering a cash discount, a firm must weigh the benefits of
freed-up cash with the cost of the cash discount.
11) Households and the government are mainly considered to be suppliers of funds,
while corporations are generally considered users of funds.
12) One of the reasons that companies merge with other companies is to secure access
to a competing industry.
13) The increasing sophistication of individual investors has decreased the role of
institutional investors in the stock market.
14) The variable growth dividend model can be used for both constant and variable
growth stocks.