Which of the following statements is FALSE?
A) As long as a firm's choice of securities does not change the cash flows generated by its assets, the capital structure decision will not change the total value of the firm or the amount of capital it can raise.
B) If securities are fairly priced, then buying or selling securities has a net present value (NPV) of zero and, therefore, should not change the value of a firm.
C) The future repayments that the firm must make on its debt are equal in value to the amount of the loan it receives up front.
D) An investor who would like more leverage than the firm has chosen can lend and add leverage to his or her own portfolio.
Answer: D
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The offer may be terminated by any of the following
A. Lapse of time B. Rejection/counteroffer by offeree C. Revocation by offeror / Death of either party D All of these.
A drawback of countertrade is that:
A. it fails to enable firms to finance an export deal. B. it is detrimental to the economy of the importing country. C. developing nations have trouble raising the foreign exchange necessary to pay for imports. D. it does not allow firms to invest in an in-house trading department dedicated to arranging and managing deals. E. it may involve the exchange of poor-quality goods that cannot be disposed of profitably.