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______ The most significant portion of the return on a share of common stock is in the form of interest.

______ Bonds are a form of equity financing that pays interest.

______ The less certain a cash flow, the higher the risk, and the lower the present value of the cash flow.

______ The tax deductibility of interest lowers the cost of debt financing, which causes the cost of debt financing to typically be lower than the cost of equity financing.

______ A preferred stockholder typically has the right to receive dividend payments before any dividends are paid to common stockholders.

______ Several investment banking firms may join together to share the financial risk associated with underwriting a new security issue.

______ In theory, to maximize their rate of return, investors should purchase a particular stock when they believe that it is undervalued and then sell it when they feel that it is overvalued.

______ In an inefficient market, stock prices adjust quickly to new public information.