11. Reynolds Paper Products Corporation follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to a decrease in the firm's dividend per share? A. The company decreases the percentage of equity in its target capital structure. B. The number of profitable potential projects decreases. C. Congress increases the tax rate on capital gains. The remainder of the tax code is not changed. D. The company decreases the percentage of debt in is target capital structure The firm's net income increases. 12. Which of the following is NOT an advantage of stock repurchases? A Repurchase announcements are viewed as positive signals by investors. B. Stockholders have a choice when the firm distributes cash by repurchasing stock C. Repurchases can be used to produce large-scale changes in capital structures D. Companies that use stock options as an important component of employee compensation usually repurchase shares in the secondary market E. Cash dividends are generally dependable, but repurchases are not 13. Which of the following is NOT an advantage of going public? A. Permits founders to diversify B. Increases the liquidity of the firm's stock C. Establishes a market value for the firm D. Facilitates raising new corporate cash E. Cost of reporting 14. Why do investment banks have strong incentives to underprice IPO issues? A. Underpricing reduces the risk to the underwriter . The IPO is an easy way for the underwriter to reward preferred customers for past and future commissions. C. Underpricing is a possible way to secure the interest from institutional investors. D. All of the above E. None of the above 1S. Which one of the following is a horizontal merger? A. When a company acquires another firm that is "upstream B. When one firm combines with another in its same line of business C. When a company acquires another firm that is "downstream D. When the merging companies are somewhat related, but not producers of the same product E. When unrelated enterprises combine