7) A unique characteristic of factoring (supply chain financing) related to other sources of financing is that…
i)Managers have zero recourse for factoring engagements (meaning that they are
not personally “on the hook” for potential losses.
ii)Factors pay special attention to the customers’ credit strength.
iii)Factors pay special attention to the vendors’ credit strength.
iv)Factors pay special attention to the company’s credit strength (the company with
which they engage in business).
8) Firms with higher real options value, or, alternatively, more growth opportunities typically display the following characteristics of corporate financial policies relative to other similar firms… (here, clearly circle the THREE that most directly apply)
i)Higher cash holdings
ii)Lower cash holdings
iii)Pay more dividends
iv)Pay fewer dividends
v)Carry a lower debt-to-equity ratio
vi)Carry a larger debt-to-equity ratio