Question 23 (2 points) Which of the following statement is correct? Clientele effect indicates that a firm should never pay dividend. Bird-in-the-hand theory suggests that a firm should adopt the residual dividend policy. MM's signaling hypothesis suggests that the optimal dividend policy is 100% payout ratio. Many factors have to be considered before a dividend policy can be set. Question 24 (2 points) Theoretically, regular stock split and stock dividend will have no impact on the firm's value since they are just additional pieces of paper. However, they provide a relatively low-cost way of signaling that the firm's prospects look good. True False Question 22 (2 points) If a firm adheres strictly to the residual dividend policy and is forced to sell new shares to raise equity capital for new investments, these situations would suggest that the dividend payout ratio is decreasing. the dividend payout ratio has remained constant. O the dividend payout ratio is increasing. O no dividends will be paid for the year. Question 21 (2 points) Which of the following statements best describe the theories of investors' preferences for dividends? MM argue that investors prefer dividends to capital gains. None of the other statements is correct. O Based on the signaling hypothesis, a firm should always fix its dividend payout ratio to please investors. The bird-in-the-hand theory suggests that a company can increase its value by reducing its dividend payout ratio. The clientele effect suggests that companies should adopt a constant-payout- ratio dividend policy to attract a certain group of investors