A firm has an excess of cash and wants to repurchases 600,000 of its 3.6 million outstanding shares at an offer price of $42.50. Immediately prior to the announcement the stock price was $37.00. At what price should the firm have made its repurchase offer?

Select one:

A. $44.40

B. $42.50

C. $40.00

D. $37.00

Which of the following is NOT true?

Select one:

A. When a firm raises its dividend, the information content or signal is usually positive for investors.

B. Stable dividends may cause a higher discount rate for the firm, thereby raising the value of the firm.

C. Dividends may be relevant because they help to resolve uncertainty about the firm and its future.

D. A general rule of thumb would be that firms with a faster growth rate have smaller payout ratios.