OPTIONS; TRUE, FALSE OR UNCERTAIN

a. When the coupon rate the investor is receiving exceeds. the market interest rate the issuing firm will choose to retire the callable bonds.

b. dividends are linked to the firms profits, With floating-rate preferred stock,

c. When a stock price increases to its par value, it will then be bought back by the corporation.

d. Underwriters are guaranteed to profit by at least the amount of the spread.

e. Debt covenants prevents a firm from seeking debt from multiple lenders.

f. Companies set each years dividend equal to the target payout ratio times that years earnings.

g. when a management decides to issue equity as opposed to issuing debt is a signal that the stock is currently overvalued.

h. For most firms, the majority of their funding is generated externally rather than internally.