D. none of the above. QUESTION 11 Which of the following investments would theor

Question

D. none of the above. QUESTION 11 Which of the following investments would theoretically always carry the highest risk premium? a. U. S. treasury bill b. common stock c. corporate bond d. any one of the above QUESTION 12 The use of stock dividends by industries in the growth stage is for what purpose? a. To dilute the ownership of current holders of equity b. To maintain cash to pay off creditors c. To signal to investors that the company is profitable d. Because cash dividends would signal to investors that the company has reached the crossover point QUESTION 13

Explanation / Answer

11) Common stock always carry the highest risk premium.

Hence, the correct option is (b) common stock.

12) The correct option is to maintain cash to pay off creditors. Most of the industries which are under growth stage tries to reduce the debt obligations and improve the efficiency with investments using the cash available.

Hence, the correct option is (b)

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