The risk of financing a project by issuing common stock is borne by
a. the issuing firm only.
b. the stockholders only.
c. both the issuing firm and the stockholders.
d. the government.
b
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The optimal bidding strategy in a first-price sealed-bid auction is identical to the optimal bidding strategy in a(n) ________ auction
A) open-outcry English B) open-outcry Dutch C) second-price sealed-bid D) dollar
The rate of return on bonds is lower than on stocks over time because
A) bond holders cannot diversify. B) bonds have a lower standard deviation in returns. C) stocks have less non-diversifiable risks than bonds. D) bonds are subject to more random risks than stocks.
Which of the following is likely to decrease the supply of U.S. dollars in the forex market?
A. If foreign interest rates are low relative to U.S. interest rates B. If investors' confidence in foreign economies increases C. If U.S. consumers prefer foreign goods to U.S. goods D. All of these will increase the supply of U.S. dollars.
The invisible hand enforces the tendency toward
a. MR = MU. b. MC = P = MU. c. MC = MPP = P. d. MRP = MPP = P.