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1) Corporations are partially exempt from taxes on dividends received from other
corporations.
2) The formula PV = FV(1 + n)i will determine the present value of $1.
3) Historically, the real rate of return has been about 2% to 3%.
4) The prices of zero-coupon bonds tend to react violently to large swings in interest
rates.
5) An underpriced offering represents a permanent lost opportunity to the issuing firm.
6) Continued consolidation is not expected in the investment banking industry, as
market share and global competition have stabilized.
7) LIFO inventory pricing does a better job than FIFO in equating current costs with
current revenue.
8) The "two-step buyout" procedure induces stockholders to delay their reaction to the
offer, since they will receive a higher price later.
9) Timing is not a particularly important consideration in financial decisions.
10) The euro is the only official currency in the Eurozone. It has a liquidity and size
second only to the U.S. dollar.
