True or False:

1) A major advantage of debt financing is that interest expense is tax deductible.

2) All other things being equal, the higher the return on equity ratio, the better the financial performance of the company.

3) The par value of stock indicates what the stock is worth.

4) Treasury stock is a corporation's own stock that has been issued and subsequently repurchased by the corporation.

5) A stock split increases total stockholders' equity.

6) Dividends in arrears are reported as liabilities on the balance sheet.

7) Issuing stock to obtain financing is called equity financing.

8) One reason why a company may choose a stock split over a stock dividend is that the stock split does not reduce retained earnings.

9) When a company reissues shares of its treasury stock, it must report a gain or a loss on the sale.

10) A corporation's charter establishes the number of shares of stock to be issued.