TRUE / FALSE

1. Both interest expense and dividends are tax deductible

2. The APR (or nominal rate) is always equal to the equivalent annual rate (EAR)

3. Companies often go public to raise capital for expansion

4. The three types of cash flows on the Statement of Cash Flows are operating, investing and financing.

5. Equity holders have unlimited upside, while bondholders can only get their coupon payments and face value of the bond as returns.

6. Both operating expenditures and capital expenditures are multi-year investments.

7. Net Present Value represents the present value of all cash flows from an investment, minus the initial outlays.

8. Liquid markets typically have large bid / ask spreads for trades.

9. Assuming interest rates are positive, the future value of $1 today will always be greater than $1