Chevron has the following data (dollars in thousands). If it follows the residual dividend model, what will its dividend payout ratio be? Capital budget $5,500 % Debt 65% Net income (NI) $4,700

54.32%

61.70%

59.04%

49.81%

Which of the following statements is CORRECT?

An increase in the stock price when a company cuts its dividend is consistent with signaling theory as postulated by Miller and Modigliani.

If the "clientele effect" is correct, then for a company whose earnings fluctuate, a policy of paying a constant percentage of net income will probably maximize its stock price.

Stock repurchases make the most sense at times when a company believes its stock is undervalued.

One advantage of the residual dividend model is that it leads to a stable dividend payout, which investors like.