QUESTION 21

1. One implication of the tradeoff theories of capital structure decision is that firms that are likely to pay taxes at high rates should carry more debt than firms in lower tax brackets.

True

False

1 points

QUESTION 22

1. One implication of the tradeoff theories of capital structure decision is that risky firms, as measures by the variability of asset returns, ought to borrow more, other things equal.

True

False

QUESTION 25

1. One would normally expect the price of stock to go up by approximately the amount of the dividend on the ex-dividend date.

True

False

1 points

QUESTION 26

1. One implication of the clientele effect is that high-tax-bracket investors tend to hold relatively high dividend-yield stocks.

True

False

1 points

QUESTION 27

1. It was found that stock prices tend to increase after announcements of stock repurchase by tender offer.

True

False