Which of the following statements is false?
A. Private equity firms often need to borrow the money needed to buy a public corporation.
B. Once a private equity firm owns a formerly publicly held corporation, they tend to cut costs and enhance efficiency.
C. Critics of private equity firms say that companies that have too much cash and too little debt become targets for private equity firms to buy.
D. A private equity firm is a group of investors that takes a privately held corporation and uses an investment banker to turn it into a publicly held corporation.
Answer: D
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Which of the following statements is true of world GDP before 1800?
A) The entire world population was living above the subsistence level of income. B) The GDP per capita in all nations was less than $500. C) Most of the countries were growing at a rate of more than 6% per year. D) Increase in GDP resulted in increase in consumption but not investment.
The demand curve for loanable funds slopes down because
A) at lower bond prices more loanable funds will be supplied. B) lower interest rates reduce the inflation rate. C) an increase in the interest rate makes borrowers more willing and able to demand more funds. D) a decrease in the interest rate makes borrowers more willing and able to demand more funds.
A firm that cheats in a cartel earns a higher profit because: a. it sells more units of its own output
b. it charges more dollars per unit of its output. c. it earns from economies of scale. d. it is able to cut its costs by undercutting the cartel.
Expansionary monetary policy will
a. often raise real interest rates in the short run. b. generally reduce aggregate demand in the short run. c. lead to higher nominal interest rates if the expansionary policy persists over a lengthy time period. d. lead to a rapid growth of real GDP if the expansionary policy persists over a lengthy time period.