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    41.Payments to preferred shareholders fixed in amount, but they can

Question :     41.Payments to preferred shareholders fixed in amount, but they can : 1953279

 

 

41.Payments to preferred shareholders are fixed in amount, but they can be withheld if the company wishes.

a.True

b.False

 

 

42.Corporation A has a capital structure of 40 percent equity and 60 percent debt, while Corporation B has a capital structure of 70 percent equity and 30 percent debt. Corporation A has the most conservative capital structure.

a.True

b.False

 

 

43.In liquidation, shareholders must wait until creditors are paid; as well, preferred equity precedes common equity.

a.True

b.False

 

 

44.Junk bonds are so called because they pay unattractive interest rates to holders.

a.True

b.False

 

 

45.High-grade corporate bonds rate low in terms of risk and high in terms of expected returns.

a.True

b.False

 

 

46.If a company fails to make a bond payment, the company is in default.

a.True

b.False

 

 

47.The two primary sources of debt financing are pledging accounts receivable and selling bonds.

a.True

b.False

 

 

48.Equity financing puts more constraints on management than debt financing.

a.True

b.False

 

 

49.High quality cyclical common stocks are riskier than medium quality preferred shares.

a.True

b.False

 

 

50.Small businesses often fail to consider venture capital as a source of funding, and they are notorious for not planning cash-flow needs properly.

a.True

b.False

 

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