Reference no: EM131836234

1. Large institutional investors can have considerable influence over an organization's corporate finance decisions. True False

2. Preferred stock is considered a hybrid because the value can increase, like common stock, but it also offers interest payments, like a bond. True False

3. When an organization is unable to fulfill the obligations of its debt covenants under a bond indenture, the legal consequence could result in the organization’s assets being transferred to the bondholders. where the assets of the firm are transferred to the debt-holders. True False

4. In an effort to optimize the capital structure, an organization may continue to add debt to the capital structure, up to some point where the tax benefits of the debt are overcome by the burden of interest payments. True False