Quiz Ch 14 – T/F Funding Sources for Most Firms
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
True or false: In the case of most firms, the major portion of their funding originates from external sources.
True or false: In the case of most firms, the major portion of their funding originates from external sources.
True or false: In the United States, historically, internally generated cash has typically covered less than 50% of the capital needs of non-financial firms.
True or false: Callable bonds’ call provision curtails the capital gain potential of bondholders which comes at their expense.
True or false: Bonds that include a callable feature generally trade at reduced prices when compared to bonds lacking this feature.
True or false: A majority of a company’s directors are usually expected to maintain independence from the firm’s management.
True or false: When an incompetent management team holds a substantial voting stake, they can utilize these votes to maintain control.
True or false: By retaining cash, firms internally generate funds, thus reducing their external funding requirements.
True or false: Investors who are apprehensive about interest rate changes find floating-rate bonds appealing.
True or false: In the scenario where a company requires new capital without relinquishing control, it could classify existing shares as Class A and introduce Class B shares with restricted voting rights for external investors.
True or false: To preserve the market value of your preferred stock, consider acquiring floating-rate preferred shares.