According to Modigliani and Miller and the dividend irrelevanceargument which of the following statements is true?
| a. | Only firms with temporary excess cash should pay a dividend. |
| b. | Regardless of the tax treatment of dividends, investors preferdividends since they receive cash today as opposed to postponingreceiving capital gains. |
| c. | Firms pay the same total return (dividends and priceappreciation combined) so without tax differences investors shouldbe indifferent to receiving their returns as dividends of priceappreciation. |
| d. | Dividends have historically been taxed a different rate thancapital gains making them less attractive to investors. |
Which of the following is not a reason comparing the dividendyield and dividend payout to comparable firms might bemisleading?
| a. | It assumes all firms in the industry have the same reinvestmentneeds. |
| b. | It should also include stock buybacks. |
| c. | The entire industry may have an unsustainable dividendpolicy. |
| d. | Firms in the industry should face similar risks and have similarinvestment needs. |
In which of the following circumstances will the firm have themost pressure to pay out more in dividends?
| a. | The firm has good projects and pays out less than available fromFCFE. |
| b. | The firm has poor projects and pays out less than available fromFCFE. |
| c. | The firm has poor projects and pays out more than available fromFCFE. |
| d. | The firm has good projects and pays out more than available fromFCFE. |
What is the term for the date that an investor must have boughtthe share by in order to receive a dividend.
| a. | Ex-dividend date. |
| b. | Dividend payment date. |
| c. | Dividend declaration date. |
| d. | Holder-of-record date. |
