1. Which of the following statements are NOT true?
I. Shelf registrations and private placements are examples of seasoned security issues.
II. Issue costs for debt are typically larger than issue costs for equity.
III. In the steps a company takes to prepare for an IPO, the "road show" precedes the "bake-off".
IV. Bearer bonds make it easier for investors to avoid paying taxes on interest income.
III and IV only
II and III only
II, III, and IV only
I, III, and IV only
I, II, III, and IV
2. Which of the following is/are true?
I. Any corporate investment partially financed with debt can be analyzed from either the enterprise perspective or the equity perspective. When properly applied, both analyses yield the same investment decision.
II. The firm's cost of capital is the minimum rate of return the company must earn on its existing assets to meet the expectations of its capital providers.
III. One of pitfalls in the practical application of the discounted cash flow techniques involves failing to build future managerial decisions into a project.
I only
I and II only
I and III only
II only
II and III only
III only
I, II, and III