Question 1. What distinguishes the internal capital market from the external capital market?
Question 2. What important factor(s) might affect a firm's internal-external financing choice?
Question 3. Why might firms prefer to issue new debt securities rather than new common stock?
Question 4. How does the U.S. tax system affect a firm's financing choices?
Question 5. What are financial markets?
Question 6. Why will an economy suffer without a developed financial market system?
Question 7. What distinguishes a real asset from a financial asset?
Question 8 Can you distinguish between direct securities and indirect securities?
Question 9. What is the difference between a savings-surplus sector and a savings deficit sector? Give an example of each.
Question 10. Why cannot all sectors be savings-deficit sectors?
Question 11. Within the financial markets, what do we mean by "private placements"?
Question 12. What are the possible advantages and disadvantages of private placements?