T/F

______ 8. The bond indenture is a legal document that specifies the rights of the bondholders and the duties of the issuing corporation.

______ 9. In general, the shorter a bonds maturity, the higher the interest rate or cost to the issuing corporation.

______ 10. Rising interest rates in the economy cause the market value of outstanding bonds to also increase.

______ 11. The holders of bonds issued by a given corporation are also the owners of the firm.

______ 12. Equity capital, such as common stock, is a permanent form of financing for a corporation, as it never has to be repaid and it has no maturity date.

______ 13. Interest paid to bondholders is tax-deductible to the issuing corporation, which lowers the cost of debt financing if the firm is profitable.

______ 14. The payment of dividends to common stockholders by a corporation is at the discretion of the firms Board of Directors.

______ 15. Similar to common stock, the dividend payment on preferred stock typically varies from year to year.

______ 16. Preferred stock is often referred to as a hybrid security, as it has characterizes of both common stock and bonds.