Which of the following is not an advantage of going public? a) It allows a firm\

Question

Which of the following is not an advantage of going public? a) It allows a firm's founders to diversify their holdings. b) It increases the liquidity of the stock. c) It establishes a value for the firm. d) It makes it easier to raise new equity capital in the future e) All of the above are advantages of going public. Question 21 Which form of informational market efficiency states that the market price of an asset contains all of the pertinent information regarding the value of that security? a) Strong-form b) Semi-strong-form c) Weak-form d) Economic-form In the formula FV = PV x (1+r), what does r denote? a) The discount rate b) The hurdle rate c) The opportunity cost d) All of the above Question 23. The actual rate of interest to be earned or paid is known as: a) stated interest rate b) nominal interest rate c) effective annual interest rate d) pure discount rate e) interest on interest rate Question 24. Which of these answers best describes an annuity due? a) A series of equally sized regularly occurring cash flows extending indefinitely into the b) A series of equally sized regularly occurring cash flows extending indefinitely into the c) A series of equally sized regularly occurring cash flows extending n periods into the future, d) A series of equally sized regularly occurring cash flows extending n periods into the future, future, with the cash flows occurring at the start of each period future, with the cash flows occurring at the end of each period with the cash flows occurring at the end of each period with the cash flows occurring at the start of each period

Explanation / Answer

Question 20). Answer :- Option c). It establishes a value for the firm.

Question 21). Answer :- Option a). Strong-form.

Question 22). Answer :- Option d). All of the above.

Question 23). Answer :- Option c). Effective annual interest rate.

Question 24). Answer :- Option d). A series of equally sized regularly occuring cash flows extending n periods into the future, with the cash flows occurring at the start of each period.

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