The assumption that the firm has a target leverage ratio means that: Select one: O a. the firm's cost of capital will increase when it accepts a new project. Ob. the firm adjusts its leverage to maintain a constant equity-to-debt ratio. O c. the firm's debt level will remain constant throughout the life of a new project. Od the risk of its debt and equity will fluctuate when it accepts a new project. Which of the following statements regarding best efforts IPOs is FALSE? Select one: O a. If the entire issue does not sell out, the underwriter is on the hook for the unsold shares. Ob. Often these arrangements have an all-or-none clause: either all of the shares are sold in the IPO, or the deal is called off. o c. For smaller IPOs, the underwriter commonly accepts the deal on this basis. Od The underwriter does not guarantee that the stock will be sold, but instead tries to sell the stock for the best possible price. Which of the following statements is FALSE? Select one O a. The most straightforward type of bank loan is a single, end-of-period-payment loan. O Bank loans are typically initiated with a promissory note, which is a written statement that indicates the amount of the loan, the date payment is due, and the interest rate. One of the primary sources of short-term financing, especially for small businesses, is the investment bank. O c. O d. With a fixed interest rate, the specific rate that the bank will charge is stipulated at the time the loan is made