Which of the following statements are true? 1) Bird in the hand hypothesis of dividends suggests that investors prefer certain dividends now to uncertain gains later. 2) Clientele hypothesis of dividends suggests that different investors prefer different stocks with respect to dividend payout levels. 3) All companies in all tax systems should pay the lowest dividend they can get away with. 4) Modigliani and Miller (1961) dividend irrelevance theorem suggests that dividend policy is not important to investors. A. 2 and 4 B. 1 and 2 C. 1,2 and 4 D. 1,2,3, and 4 Question 22 Which of the following announcements are likely to lead to an increase in share price? 1) Increase in leverage 2) Increase in dividend 3) Merger - target company 4) Merger - acquiring company A. 1 and 2 B. 1, 2 and 3 C. 1,2,3 and 4 D. 2 and 3 Question 23 Which of the following announcements are likely to lead to an increase in share price? 1) Equity issue 2) Debt issue 3) Share repurchase 4) Less than expected earnings per share