1) Miller and Modigliani's dividend irrelevance theory says that the percentage of its earnings a firm pays out in dividends has no effect on either its cost of capital or its stock price. * True False 2) A company that repurchases stock will display an increase in outstanding shares. * True False 4) If a firm that sells on terms of net 30 changes its policy and begins offering all customers terms of 2/10, net 30, and if no change in sales volume occurs, then the firm's DSO will probably increase. . True False 5) Accounts payable and accruals increase spontaneously with sales. * True False