Question 11 In which of the following industries are companies the least likely to use the Real Options approach in evaluating projects? A. Pharmaceuticals B. Mining C. Retail D. Oil and Gas exploration Question 12 A share with a current price of 10.00 goes ex-dividend. On the ex-dividend date, the price drops to 9. If the tax rate on income is 20% and the tax rate on capital gains is 10%, what was the dividend per share? A. 0.89 B. 0.95 C. 1.13 D. 1.29 Question 13 Which of the following statements about the Bird in the Hand hypothesis of dividends is true? A. Investors prefer capital gains to dividends because capital gains are usually greater than dividends B. Investors prefer dividends to capital gains because the tax rate on dividends is usually lower than that on capital gains C. Investors prefer capital gains to dividends because the tax rate on capital gains is usually lower than that on dividends D. Investors prefer dividends to capital gains because dividends now are more certain than capital gains later Question 14 Two firms, and L, are identical in every respect except for their capital structures. Company U is all-equity financed, whereas L is partly funded by debt . The market value of U's equity is 10 million and the total market value of L's debt is 5 million. The corporate tax rate is 25%. If all the assumptions of Modigliani and Miller Theorem with Taxes (1961) apply, which of the following is the market value of L's equity? A. S B 6.25 C. 10.5 D. 11.25