4) In a world with only company bankruptcy, and tax-deductible interes strategy? -level taxation of operating profits, no costs of t payments, what is the optimal corporate The f The firm should The fi rm should use all equity to maximize firm value rm's value is independent of the way it is financed b. f use all debt to maximize its value d. The firm should maximize the use of preferred stock to c reate value 5) Place the following dates related to dividend payments in proper b. record date, announcement date, ex-dividend date, record date, payment dat announcement date, payment date, ex-dividend date uncement date, record date, ex-dividend date, payment d. record date, announcement date, ex-dividend date, payment date 6) The signaling model of dividends predicts managers of firms with high growth opportunities "signal" these good b. anagers expecting higher future earnings "signal" with higher dividends c. stock prices will fall at dividend increases. d. lower quality firms will have larger dividend payouts due to poorer future investments with low dividends prospects. 7) Empirical evidence suggests that managers a. closely follow a residual model of dividend payments. b. keep nominal payments steady. change payout ratios frequently prefer to increase dividends a small amount every period . d. 8) Which of the following is a reason why an IPO is attractive to the managers of a private company? a) It does not give its private equity investors the opportunity to diversify b) It does not give access to large amounts of capital in the IPO. c) It reduces the complexity of requirements regulating the company's management It gives access to much larger amounts of capital through the public markets in subsequent offerings