Identify the decision rule that best fits each of the following descriptions. (3) Direct contributor to shareholder wealth Does not consider TVM Conservative percentage return --Options; NPV IRR MIRR PI PAYBACK
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Identify the decision rule that best fits each of the following descriptions. (3)
Direct contributor to shareholder wealth
Does not consider TVM
Conservative percentage return
--Options;
MIRR
PI
PAYBACK
Step by step
Solved in 2 steps
- One of the following decisions is not taken to increase the stock price: Select one: a. Maximize costs b. Attracting additional funds c. Maximize net income or profit d. Returning profits to owners over timeAn underpriced stock provides an expected return which is _______________ the appropriate required return based on the relevant asset pricing model. Group of answer choices less than equal to greater than greater than or equal toWhen an acquirer chooses between cash offer or stock offer, which of the followings is the least important consideration? Capital structure. O The preference of the target's managers. O Uncertainty of the estimated synergy. Тах.
- which one is correct please confirm? QUESTION 29 The dividend ____ states that investors will tend to be attracted to firms that have dividend policies consistent with the investor's objectives. a. "informational content" b. passive residual theory c. "clientele effect" d. signalThe biggest advantage of common stockholders is that they have __________ which is not available with the preferred stockholders. Select one: A. None of the given options B. Voting Right C. Claim on Assets D. Dividend RightyExplain the effect of D/E on asset returns, equity returns (assuming that cost of debt is not affected), asset beta and equity beta (assuming that debt beta is zero). Should an investor choose to invest in a stock of a company with high or low D/E, or why expected returns on these stocks are equivalent, although they are not equal?
- which one is correct please confirm? QUESTION 30 The dividend ____ states that investors will tend to be attracted to firms that have dividend policies consistent with the investor's objectives. a. "clientele effect" b. "informational content" c. passive residual theory d. signalExplain why an individual might not be convinced to make a buy/sell decision based on the Gordon growth model (also known as the dividend discount model). Support your rationale with at least one citation from the literature.1.Which of the following is not something that you would consider when evaluating the optimal capital structure? d. Security Rating. b. EBIT-EPS Analysis. a. Agency Costs. f. Neither the second nor fourth answer is correct. c. Taxes. e. All of the above are considered when determining the optimal capital structure. 2.Which of the following is an argument for the relevance of dividends? b. Reduction of uncertainty. a. Informational content. c. Some investors' preference for current income. d. All of the above. 3.All of the following are true of stock splits EXCEPT: a. Market price per share is reduced after the split. d. Proportional ownership is unchanged. b. The number of outstanding shares is increased. c. Retained earnings are changed.
- Evaluate following statement: “A lower dividend would result a lower share price.”How should (a) signaling and (b) the clienteleeffect be taken into account by a firm as it considers its dividend decision? Do signaling and clientele effects make it easier or harder to determineif investors prefer high or low payout ratios? Dothese factors influence the desirability of a stabledistribution policy versus one that is flexible andthus varies with the company’s cash flows andinvestment opportunities?Define each of the following terms:a. Optimal distribution policyb. Dividend irrelevance theory; bird-in-the-hand theory; tax effect theoryc. Signaling hypothesis; clientele effectd. Residual distribution model; extra dividende. Declaration date; holder-of-record date; ex-dividend date; payment datef. Dividend reinvestment plan (DRIP)g. Stock split; stock dividend; stock repurchase