Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Help taking test need asap! Which of the following statements is CORRECT? a. The NPV, IRR, MIRR, and discounted payback (using a payback requirement of

Help taking test need asap! image text in transcribed
Which of the following statements is CORRECT? a. The NPV, IRR, MIRR, and discounted payback (using a payback requirement of 3 years or less) methods always lead to the same accept/reject decisions for independent projects. b. For mutually exclusive projects with normal cash flows, the NPV and MIRR methods can never conflict, but their results could conflict with the discounted payback and the regular IRR methods. C. Multiple IRRs can exist, but not multiple MIRRs. This is one reason some the MIRR over the regular IRR. d. If a firm uses the discounted payback method with a required payback of 4 years, then it will accept more projects than if it used a regular payback of 4 years. e. The percentage difference between the MIRR and the IRR is equal to the project's WACC. Which of the following statements about dividend policies is CORRECT? a. Miller and Modigliani argued that investors prefer dividends to capital gains because dividends are more certain than capital gains. They call this the "bird-in-the-hand" effect. b. One reason that companies tend to favor distributing excess cash as dividends rather than by repurchasing stock is that dividends are normally taxed at a lower rate than gains on repurchased stock. c. One advantage of dividend reinvestment plans is that they allow shareholders to delay paying taxes on the dividends that they choose to reinvest. d. One key advantage of the residual dividend model is that it enables a company to follow a stable dividend policy. e. The clientele effect suggests that companies should follow a stable dividend policy

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Energy Finance And Economics Analysis And Valuation Risk Management And The Future Of Energy

Authors: Betty Simkins, Russell Simkins

1st Edition

1118017129, 978-1118017128

More Books

Students also viewed these Finance questions