3. Consider the following two statements concerning share issues:
Statement (1): Retained profits are a free source of finance to a business.
Statement (2): Investors normally view loan notes as being riskier than preference shares.
Which one of the following combinations (true/false) relating to the above statements is correct?
a. Both of the statements are true.
b. Both of the statements are false.
c. Statement (1) is true, Statement (2) is false.
d. Statement (1) is false, Statement (2) is true.
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