In which of the following circumstances will the firm have the most flexibility in setting dividend policy?

	a.	The firm has good projects and pays out more than available from FCFE.
	b.	The firm has poor projects and pays out more than available from FCFE.
	c.	The firm has good projects and pays out less than available from FCFE.

Which of the following is not a good rationale for paying dividends?

	a.	Bird in a hand theory.
	b.	Clientele Effects.
	c.	Dividends signal information to the financial markets.

The amount that a firm has available to pay in dividends is equal to which of the following?

	a.	Free Cash Flow to the Firm.
	b.	Free Cash Flow to Equity.
	c.	Incremental Cash Flow.

Which of the following is not a reason comparing the dividend yield and dividend payout to comparable firms might be misleading?

	a.	It assumes all firms in the industry have the same reinvestment needs.
	b.	The entire industry may have an unsustainable dividend policy.
	c.	Firms in the industry should face similar risks and have similar investment needs.

In which of the following circumstances will the firm have the most pressure to pay out more in dividends?

	a.	The firm has poor projects and pays out less than available from FCFE.
	b.	The firm has poor projects and pays out more than available from FCFE.
	c.	The firm has good projects and pays out more than available from FCFE.