Ourestien to Which of the following statements is FAL.SF? a) rims with a regutar dividend are often reluctant to cuporary axcass cash advould une special dividends or ahare repurchases to return cash to chareholders rather than regular dividends: b) Equity repurchanes can help insiders increase their control of a firm. may prefer share repurchases to dividends. W) If dividends are taxed at higher rates than copital. (6) By definition, share repurchases can only beneft shareholders whose shares are actually repurchased. The remaining shareholders will be neither better nor worse off. A Question 11 Suppose a firm is considering a project that delivers an up-front positive cash flow at time 0 , but delivers negative cash flows from year 1 onwards. The negative cash flows in year 1 are $10, and these grow by 2% every year thereafter. Suppose the relevant discount rate is 7%, and the project's internal rate of return is 12%. Which of the following is TRUE? a) The positive cash flow at time 0 is 100 . The firm should reject the project. b) The positive cash flow at time 0 is 200 . The firm should accept the project. c) The positive cash flow at time 0 is 100 . The firm should accept the project. ) The net present value is $100. The firm should accept the project. (e) None of the above. Question 12 O=x(1.12)10 (5 marks) You are asked to use the Gordon growth model to value the shares in Prince's Gate Enterprises. The dividend per share next year is expected to be 12, and the year after it is expected to be 12.24. The risk-free rate is 4%, the market risk premium is 5%, and Prince's Gate's beta is 1.6. What is the value per share of Prince's Gate's stock? a) 102 b) 122.40 c) 100 d) 120 e) None of the above