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Which of the following is true of equity? A) equityholders do not have voting rights. B) It does not mature, so repayment is not required.

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Which of the following is true of equity? A) equityholders do not have voting rights. B) It does not mature, so repayment is not required. C) It is a temporary form of financing for a firm. D) Equity financing is obtained from creditors. The claims of the equityholders on a firm's assets have priority over the claims of creditors because the equityholders are the owners of the firm. TRUE FALSE The value of a bond is the present value of its interest payments plus _____. A) future value of its par value B) present value of its par value C) its face value D) present value of interest payment Earnings per share represents amount earned during the period on each outstanding share of common stock. TRUE FALSE The statement of cash flows ____. A) shows the financial position of a firm at a given point of time. B) summarizes all the purchase and sale of fixed assets and raw materials C) provides insight into a firm's operating, investment, and financing cash flows D) classifies a firm's cash flows as operating, investing, financing, and other activities Relevant cash flows for a project are best described as _____. A) incidental cash flows B) incremental cash flows C) sunk cash flows D) contingent cash flows Opportunity costs should be included as cash outflows when determining a project's incremental cash flows. TRUE FALSE Valuation of a financial asset requires knowledge of A. the future cash flows B. the appropriate discount rate C. the past price movements D. A and B above E. all of the above

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