(W8C19.20) (T/F) Miller and Modigliani support the Dividend Irrelevance Theory. They state the payout in dividends has no effect on stock value. Select one: True False
True
Modigliani-Miller support irrelevance.
Implies payout policy has no effect on stock value or the required
return on stock.
Theory is based on unrealistic assumptions (no taxes or brokerage
costs.)
Thanks
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(W8C19.20) (T/F) Miller and Modigliani support the Dividend Irrelevance Theory. They state the payout in dividends...
(W8C19.20) (T/F) In the Tax Effect Theory of Dividends, investors prefer a higher dividend payout so they can write more off on their taxes. Select one: True False
The Modigliani-Miller dividend irrelevance theory says that a stockholder can construct his or her own dividend policy. Suppose that an investor believes the company’s dividend is too big. How can the investor make it smaller? Or, if the investor wants a bigger dividend, how can that be achieved? How does this prove, or disprove, the M-M theory?
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(W8C19.20) (T/F) Companies are required to pay dividends to their stockholders. Select one: True False
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(W8C19.20) (T/F) A stock can split and add additional shares as specified per existing share OR a stock can reverse split and decrease the number of outstanding shares by the predetermined ratio. Select one: True False
12. Dividend policy A firm’s value depends on its expected free cash flow and its cost of capital. Distributions made in the form of dividends or stock repurchases impact the firm’s value and the investors in different ways. Some analysts have argued that a firm’s value should solely be determined by its basic earning power and the business risk of the firm. Which of these concepts would support these analysts’ argument? The signaling hypothesis The clientele effect Dividend irrelevance theory...
(W8C19.20) (T/F) A put warrant gives an investor the right to sell a security. Select one: True False
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