Question 7 (2 points)

Suppose a company has a $250,000 capital asset with 20% capital cost allowance (CCA) rate whose year-end undepreciated capital cost (UCC) is $200,000. If the 20% is a declining balance rate, the CCA for the new year is

Question 7 options:

	$50,000.
	$30,000.
	$20,000.
	$40,000.

Question 8 (1 point)

Bird-in-the-Hand theory suggests that

Question 8 options:

	dividend policy has no effect on either the price of a firm's stock or its cost of capital.
	investors value the low-payout companies more than the high-payout companies.
	investors value a dollar of expected dividends more highly than a dollar of expected capital gain.
	no one has yet identified a completely unambiguous relationship between distribution level and the cost of equity or firm value.