Equity Investments - Equity Investments Section 2
16. Which of the following statements is least accurate?
- Option : B
- Explanation : Options A and C are correct. Option B is not true. Just because a share is putable or callable does not make it any easier to sell.
- Option : B
- Explanation : A and C represent reasons for why a company might raise capital by issuing equity. It is unlikely that a company will finance working capital requirements by issuing equity.
18. A company issues equity on a primary market:
- Option : A
- Explanation : A company issues equity on a primary market to raise capital and increase liquidity.
19. Which of the following is a primary goal for a company to raise equity capital?
- Option : C
- Explanation : To finance revenue generating activities (organic growth).The capital is used to purchase long-term assets, invest in profit-generating projects, expand to new territories, or invest in research and development.
20. Which of the following is least accurate in describing company’s book value?
*/?>
*/?>
*/?>
*/?>