Higher precautionary balances of cash

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Reference no: EM131624059

1. Common Stock investors receive their return in two ways: the opportunity to participate in price appreciation and the potential to receive cash dividends.

True

False

2. Preferred stock is a hybrid security that has characteristics of both long-term debt and common stock.

True

False

3. The more difficult it is to estimate a firm's cash flow needs, the greater the need to carry higher precautionary balances of cash.

True

False

4. If a company accepts only projects that meet or exceed its weighted average cost of capital, that company will consistently be creating shareholder value.

True

False

Reference no: EM131624059

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