Q#$1($Chapter $14).$ Some publicly traded firms do stock splits. For example, Apple, Inc. $($AAPL$)$ announced a $4$ to $1$ stock split in August $2020.$ Google and Amazon also announced large stock splits in $2022.$ You read in chapter $14$ that, in theory, a $4$:$1$ stock split would increase the number of outstanding shares four fold and cut down the post$-$split stock price to $1/4$ of pre$-$split price, thus leaving the wealth of Apple's shareholders unchanged. Unlike Apple, many other successful firms such as Berkshire Hathaway with per share stock prices much higher than Apple's have not done stock splits. Also, some brokerage firms have cut down the stock trading commission to zero and allowed investors to buy fractional shares of firms. So you are puzzled why some shareholders, traders, and analysts adamantly believe that stock splits benefit shareholders. Please explain whether or not stock splits in general would benefit a firm's current shareholders with at least a $5-$year investment $($holding$)$ horizon. You would want to use your understanding of chapter $14$ stock split material in your explanation. Limit your answers to twenty $(20)$ sentences.

Q#$2($Chapter $14).$ After the $2018$ tax law which lowered corporate tax rate from $35\%$ to $21\%,$ an increasing number of U$.$S$.$ publicly traded firms announced stock buyback $($repurchase$)$ programs. Congress prohibited firms from using the $2020$ Coronavirus $$2\mathrm{.}3$ trillion stimulus package for stock buybacks. Further, the Inflation Reduction Act of $2022$ imposed a $1\%$ tax on the firm's stock buyback transactions. Please explain what benefits or rationale firms see in stock repurchases and how would investors react to these repurchase programs. You would want to use your understanding of chapter $14$ stock repurchase discussion in your answers. Limit your answers to fifteen $(15)$ sentences.

Q#$3($Chapter $15$; optional extra$-$credit question, $10$ points$).$ The M& M capital structure theories in chapters $15$ and $21$ persuasively argue that the optimal long$-$term debt is not $0\mathrm{.}0\%$ debt due to the tax shield benefit of debt. Table $15-1$ in the text shows that, consistent with M&M theories, the average long$-$run debt to equity ratio in many different industries is positive $($e$.$g$.,55\%$ for hotels, $86\%$ for industrial companies, and only $9\%$ for tech sector$).$ Yet many large technology firms, such as Alphabet $($Google$),$ Microsoft, and Apple, do not use any long$-$term debt $($or little debt$)$ to finance their operations and new investments. Please explain whether it makes financial sense for big technology firms $($do not mix it with start$-$up tech firms$)$ to use no debt and give up the tax shield benefit of debt. You would want to use your understanding of signaling theory, R&D under asymmetric information theory, financial distress costs, and debt tax shield in your answers. Limit your answers to no more than twenty $(20)$ sentences.