Large Firms Find External Funds to Be More Costly Than

question 48

Multiple Choice

Large firms find external funds to be more costly than internal funds because

• A)they must pay taxes on external funds but not on internal funds.
• B)external funds must be raised in financial markets, whereas internal funds may be raised from banks.
• C)legally a portion of external funds must be distributed to shareholders, whereas all internal funds may be used for investment projects.
• D)outside investors require a higher return to compensate them for having to obtain information about the firms.

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Definitions:

Meditation

Mental series of exercises meant to refocus attention and achieve a trancelike state of consciousness.

Mental Exercises

Activities designed to improve cognitive functions such as memory, focus, and problem-solving skills.

Trancelike State

A state of deep relaxation or hypnosis in which an individual may be more open to suggestions and less aware of their surroundings.

Activation-information-mode Model

A theory suggesting that dreams are initiated in the brain's pons and that their content is affected by the dreamer's personal life and experiences.