16. Which of the following are correct statements concerning corporate dividends? I. Dividends are generally treated as ordinary income for individual shareholders. II. Dividends are not a liability of firms, and firms can reduce dividends. III. Dividends are a tax-deductible expense for firms once they have been paid. IV. A company's stock price can be computed using the perpetuity formula if this firm pays a constant dividend. A. I and II only B. III and IV only C. I, II, and IV only D. II, III, and IV only E. I, II, III, and IV 17. The common stock of Ruby Janes pays a constant annual dividend. Thus, the market price of Ruby Janes stock will: A. always remain constant even when the market rate of return changes. B. always increase over time. C. always decrease over time. D. increase when the market rate of return increases. E. decrease when the market rate of return increases. 18. Gordon Growth Company is expected to pay a dividend of $2 next period, and dividends are expected to grow at 3% per year. The required return is 13%. What is the expected stock price after 2 years? A. 20.86 B. 21.22 C. 21.85 D. 22.32 E.22.81 19. Which one of the following earned the LOWEST risk premium over the period 1926 - 2015? A. small-company stocks B. large-company stocks C. long-term government bonds D. U.S. Treasury bills E. long-term corporate bonds 20. A firm has 160,000 shares of stock outstanding, sales of $1.94 million, net income of $126,400, a price-earnings ratio of 21.3, and a book value per share of $7.92. What is the market-to-book ratio? A. 2.69B. 1.39C. 2.45D. 2.12E. 1.84