True or False and why: 1- Most ratio comparisons are made over time and with companies like the target company. 2- Flotation costs are generally reflected in a project's after tax cash flows. 3- Financing costs must be included in a project's after-tax cash flows. 4- A liquidity premium is paid to bond issuers with a high current ratio and TIE ratio. 5- As market rate rise the price of an existing bond is likely to rise as well.
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Ratio comparisons can be made with different companies and at different points in time, not just with the target company and over time. 2- True. Flotation costs are expenses incurred in the process of raising capital, and they reduce the amount of funds available Show more…
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