SECTION A - TRUE/FALSE INSTRUCTION: Read each statement carefully and determine whether the statement is true or false. Please fill in the answers in the table given below by writing "T" for true or "F" for false in the space provided. (Rubrics: 1 mark for each correct answer, for 9 statements, total mark is 9) Questio 1 2 2 3 4 5 6 7 8 9 n Answer Score 1. The capital structure of a firm is the total capital divided by the ordinary shares and preference 2. Over capitalization shares is good for the company because the company has more capital than it needs. 3. Ordinary shares represent a residual ownership position in the corporation. 4. The market value of shares is enhanced by dividend and therefore share capital is not free 5. A capital investment is one that is undertaken by only large corporations. Page 2 of 7 UNIVERSITY OF BURAIMI College of Business 6. The market price of common stock is determined by individuals buying and selling the stock. 7. The value of a bond will be lower than the par value when both the coupon rate and the discount rate is the same. 8. The price at which the bond is traded in the stock exchange is the maturity value. 9._Shareholder wealth in a company is the value of the company assets less its liabilities