36.True False When comparing your firm to a competitor, it is important to evaluate differences in systematic risk (assuming there are some).

True False Many companies rely on investment bankers to judge the market response because they generally have a good understanding of the bond rating process and continual contact with security analysts.

True False Tax changes combined with transaction cost may cause the market to be in disequalibrium.

. True False When conducting a pro-forma analysis, it is necessary to only predict the income statement to calculate the projected financing needs of the organization.

True False The holding of reserves, and the sale of assets are two available resources that may offset negative cash flow.

True False Nonfinancial items should not be considered when determining the optimal financial structure.

. True False The lessee uses the assets while the lessor owns the asset.

True False Beta measures diversifiable or nonsystematic risk

True False The IRS has guidelines for determining if a lease is really an installment sale. True False The ability to shift the risk of obsolescence, serviceability and residual value to the lessee is typical.

. True False Leases are often used by companies to remove the cost of assets and the corresponding debt from the balance sheet.