1.-The higher the required rate of return of a common stock the higher its price.

True

False

2.-Which of the following statements is true?

a. None of THESE

b. Project with positive NPVGO always increase firm value.

c. The price of bonds increases if the market interest rate decreases.

d. The price of a stock increases if the dividends paid increase.

e. All of THESE

3.- In a capital budgeting project the higher the depreciation tax shield the higher the project value.

True

False

4.- The NPV rule will always provide the best decision among mutually exclusive projects.

True

False

5.- Which of the following statements is not true?

a. A project should include sunk costs.

b. All of THESE are true

c. A project should include the discount rate.

d. A project should include opportunity costs