Which of the Following Statements Is True

question 44

Multiple Choice

Which of the following statements is true?

• A) In recent years external equity has been a large percentage of total sources of financing even though this is, by far, the most expensive source of financing.
• B) In recent years external equity has been a large percentage of total sources of financing. Some argue that this relationship exists because financial managers think stock prices are too high.
• C) In recent years external equity has been a small percentage of total sources of financing even though this is, by far, the cheapest source of financing.
• D) In recent years external equity has been a small percentage of total sources of financing. Some argue that this relationship exists because financial managers think stock prices are too low, even though this is inconsistent with efficient markets.
• E) In recent years external equity has been a small percentage of total sources of financing in part because of the legal reserves that the firms must hold against equity.

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Definitions:

Socialization

The process by which individuals learn and internalize the values, beliefs, and norms of their society, becoming functional members of that society.

Agents of Socialization

Individuals, groups, or institutions that play significant roles in integrating individuals into the norms, values, and cultures of their society.

Social Approval

The affirmation, acceptance, or endorsement by members of a society or group, often influencing behavior and conforming to societal norms.

Conformity

The act of aligning one's behaviors, attitudes, or beliefs to match those of a group or societal norms.