Equipment trust certificates issued by a firm should be safer than its debentures.​

A firm will prefer to issue preferred stock rather than debt because the dividend is tax deductible.

The net present value of an investment is independent of the firm’s cost of capital.​

The present value of an annuity is worth more if interest rates are 5% instead of 10%.​

​The future value of a dollar 1. increases with lower interest rates 2. increases with higher interest rates 3. increases with longer periods of time 4. decreases with longer periods of time

The net present value of an investment is independent of the firm’s cost of capital.​

​The future value of a dollar 1. increases with lower interest rates 2. increases with higher interest rates 3. increases with longer periods of time 4. decreases with longer periods of time

The present value of an annuity is worth more if interest rates are 5% instead of 10%.​

Which of the following is a cash outflow?​

A firm may initially increase its use of debt without increasing the cost of capital.