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When investors have incomplete information, a firm's dividend policy can affect its share price True False Question 2 (2 points) Saved If dividends are taxed
When investors have incomplete information, a firm's dividend policy can affect its share price True False Question 2 (2 points) Saved If dividends are taxed at a higher rate than capital gains, investors should prefer share repurchases. True False Question 3 (2 points) Saved The value of equity should decrease by the present value of expected bankruptcy costs. True False Individual investors are taxed at a lower rate on capital gains than on dividends. True False Question 5 (2 points) Saved With market frictions, capital structure will affect firm value. True False Question 6 (2 points) Saved Bankruptcy costs reduce firm value, leading managers to avoid high leverage. True False
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