True or False

5. The corporate valuation model can be used only when a company doesnt pay dividends.

6. From an investors perspective, a firms preferred stock is generally considered to be less risky than its common stock but more risky than its bonds. However, from a corporate issuers standpoint, these risk relationships are reversed: bonds are the most risky for the firm, preferred is next, and common is least risky.

7. The preemptive right is important to shareholders because it protects the current shareholders against a dilution of their ownership interests.