5. When you use relative valuation, you are trying to price assets based upon what similar assets are being priced at. In comparing across these assets, which of the following do you have to do?

a. Find similar or comparable assets, with trading prices

b. Standardize the prices to a common variable available for all assets

c. Control the standardized prices for differences across the assets

d. All of the above

e. None of the above

6. There is evidence that companies acquire a dividend clientele that reflects their dividend policy. Thus, if you pay high dividends, you accumulate investors who like high dividends and if you pay no dividends, you get investors with that preference. If you do pay high dividends, which of the following groups of investors are you more likely to see holding your stock? (You can pick more than one)

a. Wealthy & younger individuals

b. Older & poorer individuals

c. Growth-oriented mutual funds

d. Income-oriented mutual funds

e. Pension funds

7. Rutherford Inc. is a publicly traded company that reported net income of $100 million in the most recent year, after depreciation of $ 50 million. The firm reported capital expenditures of $75 million and an increase in working capital of $20 million. If total debt at Rutherford increased by $15 million during the course of the year, how much could Rutherford have afforded to pay out in dividends during the course of the year?

a. $5 million

b. $20 million

c. $30 million

d. $55 million

e. $70 million

8. Tanaka Inc. is an under levered firm that believes that wants to increase its debt ratio over time. Which of the following dividend policies will help the most in accomplishing that objective?

a. Return more cash than you have available as potential dividends (Cash returned > FCFE)

b. Return less cash than you have available as potential dividends (Cash returned < FCFE)

c. Return cash roughly equal to potential dividends (Cash returned = FCFE)

Please show work.Thank you