Which of the Following Statements Is Correct

question 25

Multiple Choice

Which of the following statements is correct?

• A) One of the advantages of common stock financing is that there is no dilution of owners' equity,as there is with debt.
• B) If the market price of a stock falls below its book value,the firm can be liquidated,with the book value proceeds then distributed to the shareholders.Thus,a stock's book value per share sets a floor below which the stock's market price is unlikely to fall.
• C) The preemptive right gives a firm's preferred stockholders preference to assets over common stockholders in the event the firm is liquidated.
• D) The steeper the demand curve for a firm's stock,the higher will be its flotation costs when it sells a new issue of common stock,other things held constant.
• E) All of the above statements are false.

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Definitions:

American Troops

Members of the United States Armed Forces, encompassing the Army, Navy, Marine Corps, Air Force, and Coast Guard, who can be deployed domestically or internationally.

Cortez's Conquest

Refers to the expedition led by Hernán Cortés in the early 16th century that resulted in the downfall of the Aztec Empire and the establishment of Spanish rule in Mexico.

American General

A high-ranking officer in the United States Army, Marine Corps, or Air Force, often commanding large military units or holding senior administrative positions.

Mexico City

The capital and largest city of Mexico, known for its rich history, culture, and significant influence in Latin America.