1. T F The dividend irrelevance theory says that the firm's dividend policy has no effect on either its value or its cost of capital.
2. T F Managers, on average, do not raise dividends unless they believe future earnings will be able to sustain the higher level dividends.
3. T F Firms following a constant dividend ratio payout policy will cause investors to have greater uncertainty concerning expected dividends each year when the earnings for the firm are stable over time. T F
4. T F If the information content, or signaling, hypothesis is correct, then changes in dividend policy can be important with respect to firm value and capital costs.