Which of the following statements is false: Multiple Choice Most corporate bonds are in the form of an interest only loan. One drawback with financial planning models is that they rely on accounting relationships and not financial relationships that focus on the size, timing, and risk of cash flows. The sustainable growth rate is the maximum rate of growth for a firm that can be maintained without using external financing. O Exchange members on the NYSE must purchase trading licenses that entitle the member to buy and sell securities on the floor of the exchange. The connection between sales growth and external financing for the typical growth firm shows the need for new assets grows at a much faster rate than the addition to retained earnings, so internal equity provided by retained earnings rapidly disappears and the firm then needs to resort to external financing. Which of the following statements is false: Multiple Choice The real rate on an investment the percentage change in your buying power. All else equal, increasing the ROE will decrease the sustainable growth rate. O The present value of an annuity due is the present value of an ordinary annuity multiplied by (1+r). O Relevant cash flow for a project is a change in the firm's overall future cash flows that comes about as direct a consequence of the decision to take the project. O With a pure discount or interest-only loan, the principal is repaid all at once. Which statement is not correct: Multiple Choice Compensation for expected future inflation in the term structure is referred to as the inflation premium. Marginal or incremental revenue represent the change in revenue that occurs when there is a small change in output. An example of an opportunity cost is if your company converted an old warehouse that it had purchased many years ago into condominiums. In addition to dividends, shareholders also have the right to share proportionally in the liquidation of the firm's assets in bankruptcy. The amount by which the call price on a bond exceeds the face value of the bond is called the call premium