Favor dividends since dividends are tax$-$deductible for the paying corporation whereas retained earnings, which produce capital gains, are not tax$-$deductible.

QUESTION $18$

Assume a project has normal cash flows. All else equal, which of the following statements is CORREC

The project's IRR increases as the WACC declines.

The project's NPV increases as the WACC declines.

The project's MIRR is unaffected by changes in the WACC.

The project's regular payback increases as the WACC declines.

QUESTION $19$