On the income statement, the liabilities that are due earliest, current liabilities, are listed last, and the liabilities due later, such as long- term debt, are listed first. O FALSE O TRUE Which of the following statement is correct? O Partnerships are businesses owned by two or more people, each of whom is responsible for the firm's debts, and the exception is a limited partner, a partner who contracts for limited liability. O All the answers are incorrect. O The agency problem increases if we tie the managers' compensation to the performance of the company and its stock price. Before the 2008 financial crisis, an insurance company known as GEICO sold an insurance product called a credit card loans to protect those holding these mortgage-backed securities in the event of defaulting mortgages. O Publicly traded corporations cannot raise capital by issuing new shares of common stock to the public. (TRUE or FALSE?) The less risk associated with future cash flows, the higher the firm value, and the more risk, the lower the firm value. FALSE O TRUE
