I. Directions: Write TRUE if the statement is correct; write FALSE if the statement is wrong. Write your answer on the space provided af ter each number. _1. Equity funding involves repayment. _2. The...

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Extracted text: I. Directions: Write TRUE if the statement is correct; write FALSE if the statement is wrong. Write your answer on the space provided af ter each number. _1. Equity funding involves repayment. _2. The primary disadvantage of equity funding is that the firm's owners relinquish part of their ownership interest and may lose some control. _3. Return on equity depends on company's earnings. _4. Debt financing gives privilege of ownership in a company. _5. When an entrepreneur financed his/her business with debt, lender has the right to tel him/ her how to run a business. _6. When an entrepreneur financed his/ her business with debt, payments are unpredictable and he/ she has no idea what needs to pay every month to pay off the loan. _7. When an entrepreneur financed his/ her business with debt, he/she keeps al the profits. _8. The lender can force the entrepreneur into bankruptcy if he/she cannot pay his/ her loan payments. _9. To force a borrower into bankruptcy for not making their loan payments every month, the lender must go to court and prove that the business owner cannot pay the debt. -----_10. If a corporation goes bankrupt, lenders can go after the assets of the corporation, and not of the owners.