true or false

6. A preferred stock that pays an annual dividend of $10, has a par value of $100, and has a required return of 5% will be valued at $200. 7. One of the disadvantages of the payback method is that it ignores time value of money. 8. NPV is the most theoretically correct capital budgeting decision tool examined in the text. 9. One positive feature of the payback method is it emphasizes the earliest forecasted free cash flows, which are less uncertain than later cash flows and provide for the liquidity needs of the firm. _10. The profitability index is the ratio of the company's net income (or profits) to the initial outlay or cost of a capital budgeting project