_5. When an entrepreneur financed his/her business with debt, lender has the right to tel him/ her how to run a business. _6. When an entrepreneur financed his/ her business with debt, payments are urpredctable and he/ she has no idea what needs to pay every month to pay off the loan. _7. When an entrepreneur financed his/ her business with debt, he/she keeps al the profits.
_5. When an entrepreneur financed his/her business with debt, lender has the right to tel him/ her how to run a business. _6. When an entrepreneur financed his/ her business with debt, payments are urpredctable and he/ she has no idea what needs to pay every month to pay off the loan. _7. When an entrepreneur financed his/ her business with debt, he/she keeps al the profits.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Number 5-10
Transcribed Image Text:I. Directions: Write TRUE if the statement is correct; write FALSE if the statement is wrong. Write your answer on
the space provided af ter each number.
_1. Equity funding involves repayment.
_2. The primary disadvantage of equity funding is that the firm's owners relinquish part of their
ownership interest and may lose some control.
_3. Return on equity depends on company's earnings.
_4. Debt financing gives privilege of ownership in a company.
_5. When an entrepreneur financed his/her business with debt, lender has the right to tel him/ her how
to run a business.
_6. When an entrepreneur financed his/ her business with debt, payments are unpredictable and he/ she
has no idea what needs to pay every month to pay off the loan.
_7. When an entrepreneur financed his/ her business with debt, he/she keeps al the profits.
_8. The lender can force the entrepreneur into bankruptcy if he/she cannot pay his/ her loan payments.
_9. To force a borrower into bankruptcy for not making their loan payments every month, the lender
must go to court and prove that the business owner cannot pay the debt.
-----_10. If a corporation goes bankrupt, lenders can go after the assets of the corporation, and not of the
owners.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education