Which of the following statements is correct?If the demand curve for a firm's stock is relatively flat, the firm will have a more difficult time raising alarge amount of new equity funds for expansion than would be true if the demand curve were steeper.Flotation costs to raise a given amount of funds would, typically, be smaller under a best-effortsarrangement than with an underwritten offering, and the corporation is also more certain of gettingthe needed funds under a best-efforts offering. This is why best-efforts deals are most common.Par value is not necessarily the actual price at which stock is issued by the firm, but it does constitutethe maximum legal liability per share in the event of bankruptcy. Thus, if a firm sold $5 par stock toinvestors at $30 per share, in the event of bankruptcy the firm would have to pay the stockholders nomore than $5 per share.The preemptive right gives current stockholders the right to purchase, on a pro rata basis, anyadditional shares sold by the firm. This right protects current stockholders against both dilution ofcontrol and dilution of value.One of the legal rights that often goes with common stock is the preemptive right. This is the right of. present stockholders to purchase their "proportional share" of all new securities that might be issuedby the firm, including common and preferred stock, and all types of debt