1. The Pecking Order Hypothesis suggests that profitable firms will first use internal financing to fund investment opportunities.

True False

2. You have a project that costs $1, 600,00. It has a 1/4 chance of paying off $8,000,000 and a 3/4 chance of paying off $0. The expected profit from the new project is $400,000.

True False

3. John purchases 100 shares on August 14th with a settlement date of August 16th. The shares recently declared a dividend payable to shareholders of record as of August 15th. John will pay nothing for the dividend because he was not the shareholder of record on August 15th.

True False