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True False 0 0 1. Bid price > Asked price O 0 2. Stock dividends are treated as an interest expense on a firm's income statement. 0 O 3. Bondholders are normally denied company voting rights. O 4. It is fair to say that preemptive rights are more valuable to small investors than to large ones. 5. Divo = Di = D2 =D3 implies constant dividend growth. 0 O O 6. In the Gordon model, r must exceed g for meaningful results. 0 O 7. It is fair to say that Regulation A is less beneficial to large businesses than to small ones. 8. Stocks are less difficult to price than bonds. 0 o 0 9. It is fair to think of common stock as permanent funding for a firm. O O 10. When a publicly held firm sells additional shares, it does so in the secondary market. 11. If a firm sells stock worth $9 million, it must file with the SEC. 0 O 0 O 12. It is fair to expect a firm's number of authorized shares to be less than its number of outstanding shares. 13. Operational efficiency refers to how quickly information is reflected in stock prices. 14. Most researchers believe that the stock market is semi-strong form efficient. 0 O 0 O 15. The New York Stock Exchange is part of the primary market. O O 16. If a stock pays a $2 dividend forever and investors want a 20% return, the stock's price $15. 17. If the stock above stops paying dividends after 10 years, its price > $10. O 0 0 O 18. If dividends were $5 in 2015 and $6 in 2020, the dividend growth > 5%. 0 0 19. If a $1 dividend grew annually at 4% forever and investors wanted a 10% return, the stock price 15%. 0 0

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