6. Which of the following is the most valid reason to split a stock that has a market price of RM110 per share? A. Conserve cash B. Obtain additional capital C. Increase investor's net worth D. Reduce the market price to a more popular trading range 7. A firm following an aggressive financing policy is: A. not subject to any increased risks regarding cash shortfall. B. subject to a negligible increased risk of a cash shortfall. C. subject to increased risks of a cash shortfall. D. none of the above. 8. The risk-return trade-off in managing a firm's working capital involves which of the following? A. A trade-off between debt and equity B. A trade-off between liquidity and activity C. A trade-off between the firm's liquidity and its profitability D. None of the above 9. Which of the following statements about factoring is TRUE? A. The borrowing firm can obtain a greater advance against inventory in a factoring arrangement than in a typical line of credit secured by accounts receivable B. The firm, not the factor, bears the risk of collecting bad receivables in a factoring arrangement C. Factoring involves the outright sale of a firm's accounts receivable to the factor D. Factoring firms sell the receivables of other firms 10. A company is technically insolvent when: A. current ratio is less than 1.0. B. cash outflows in a given period are greater than cash inflows. C. earnings before interest payments are less than the interest payments. D. it lacks the necessary liquidity to promptly pay its current debt obligations