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Lotteries have been around for years.  In fact as you may read on this page Thomas Jefferson ran a lottery.  So why not?  It is free and you might wind $1m..  Of course the odds are VERY VERY low, but....

True or False

1. _____Ceteris Paribus, firms with higher business risk should have lower debt levels.
2. _____ Modigliani and Miller Proposition #1 siad that firms can not increase their value by chaning their capital structure.
3. _____ Debt usually has a lower cost than equity.
4. _____ The Pecking Order by Myers and Majluf holds that managers would rather use internally generated funds before issuing new securities.
5. _____ In aggregate US firms issue more equity than debt.
6. _____ Debt is generally better suited for firms with many growth options.
7. _____ Debt places more limits on the manager's ability top spend cash than does equity.
8. _____ When MM's assumptions are relaxed, capital structure begins to matter.
9. _____ Debt makes good times better but bad times worse. 
10. ____ The better the collateral of a firm's assets, the more debt the firm is likely to have.

Answers
1. T
2. T
3. F
4. T
5. F
6. F
7. T
8. T
9. T
10.T

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