Question:

1 . Under the pecking Order Theory of finance, a company will get funds to finance a project in the order of:

• Internally-generated funds, stretch net working capital, borrow from bank, public debt, common stock, preferred stock
• Internally-generated funds, stretch net working capital, borrow from bank, common stock, preferred stock, public debt
• Internally-generated funds, stretch net working capital, public debt, borrow from bank, common stock, preferred stock
• Internally-generated funds, stretch net working capital, borrow from bank, public debt, preferred stock, common stock,
• None of the other answer

2 . The goal of finance is to maximize shareholder wealth, and the dividend policy that goal is

• Constant dividend policy
• Dividend smoothing policy
• Stable dividend policy
• Residual dividend policy
• None of the other answers.

3 . A company will institute a stock repurchase for any of the following reasons EXCEPT

• Management believes that shares of stock are undervalued
• Tax reasons
• Don't want to create expectations like a dividend payment
• Reduce the number of shares on the market
• All the other answers are reasons