1. Which one of the following statements is true?
Bondholders are generally granted voting rights equal to those of common shareholders.
Unpaid common stock dividends can force a firm into liquidation.
Payments of both interest and dividends are tax-deductible as business expenses.
U.S. non-financial firms tend to use more debt than equity financing.
Debt increases the possibility of financial distress.
2. The past five monthly returns for PG Company are 4.35 percent, -.25 percent, 5.75 percent, 7.89 percent, and 5.44 percent. What is the average monthly return?