True False or Uncertain (TFU). These are statements that you must analyze. They are the most probing questions of the exam. Credit is given only for your explanation. If you find a very good reason for doubting the statement, label it "FALSE" and supply your reasoning. I am more interested in your reasoning than whether you say T, or F, or U. Examples: TFU "Dividend policy influences the firm's investment policy because dividends drain the firm of cash." The statement is false because the firm could raise new funds by a stock offering, issuance of bonds, or by selling existing assets. Moreover, MAM have a famous proof that dividend policy does not affect the value of share prices under their assumptions of perfect capital markets. Since the goal of the firm is assumed to be to maximize its share price, dividend policy is irrelevant. That is the kind of explanation you could supply. TFU "The Weighted Average Cost of Capital is the benchmark for evaluating all future projects the firm reviews. False. The quickest way to see this is to consider a project that is either far less risky or far more risky than is the existing firm. But if the firm is considering doing a simple expansion of its existing business then the statement could be true