1.The ability of shareholders to undo the dividend policy of a firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is referred to as:

2.According to MM Proposition II with no taxes, the:

Group of answer choices

return on assets is determined by financial risk.

required return on equity is a linear function of the firm's debt-equity ratio.

required return on assets exceeds the weighted average cost of capital.

cost of equity in inversely related to the firm's debt-equity ratio.

cost of debt must equal the cost of equity.