Which of the following questions are False? 1. If changes in the bankruptcy code

Question

Which of the following questions are False? 1. If changes in the bankruptcy code make bankruptcy lesscostly to corporations, then this would likely reduce the debtradio of the average corporation. 2. The firm's financial risk may have both market risk anddiversifiable risk components. 3. The bird-in-the-hand theory argues that investors preferdividends because dividends are taxed more avorably than capitalgains. 4. Two firms with the same dividend and growth rate must alsohave the same stock price. 5. If a company has two classes of common stock, Class Aand Class B, the stocks may pay different dividends, but the twoclasses must have the same voting rights. 6. Gross working capital represents current assets used inoperations. 7. The best and most comprehensive picture of a firm'sliquidity position is whown by its cas budget, which forecasts cashinflows and outflows. 8. Permanent current assets are those current assets that mustbe increased when sales increase during an upswing. 9. A financial lease is a lease that does not provide formaintenance services, is not cancelable, and is fully amortizedover its life, also called a capital lease. 10. Warrants cannot be traded separately from the bond withwhich they are associated.     Which of the following questions are False? 1. If changes in the bankruptcy code make bankruptcy lesscostly to corporations, then this would likely reduce the debtradio of the average corporation. 2. The firm's financial risk may have both market risk anddiversifiable risk components. 3. The bird-in-the-hand theory argues that investors preferdividends because dividends are taxed more avorably than capitalgains. 4. Two firms with the same dividend and growth rate must alsohave the same stock price. 5. If a company has two classes of common stock, Class Aand Class B, the stocks may pay different dividends, but the twoclasses must have the same voting rights. 6. Gross working capital represents current assets used inoperations. 7. The best and most comprehensive picture of a firm'sliquidity position is whown by its cas budget, which forecasts cashinflows and outflows. 8. Permanent current assets are those current assets that mustbe increased when sales increase during an upswing. 9. A financial lease is a lease that does not provide formaintenance services, is not cancelable, and is fully amortizedover its life, also called a capital lease. 10. Warrants cannot be traded separately from the bond withwhich they are associated.    

Explanation / Answer

1 - False

2 - True

3 - True

4 - False

5 - False

6 - True

7 - True

8 - True

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