1. Which of the following theories depends on the spread between the tax rates on capital gains and ordinary income?

   	a.	Dividend irrelevance
   	b.	Dividend aversion
   	c.	Dividend preference
   	d.	None of the theories depend on the spread between these tax rates.
   	e.	They all depend to some degree on the spread between these tax rates.

2 points

QUESTION 2

1. From an accounting standpoint, stock splits are accomplished by:

   	a.	increasing the number of shares outstanding.
   	b.	a and c
   	c.	reducing the par value of existing shares.
   	d.	increasing par value of existing shares.

2 points

QUESTION 3

1. Everything else held constant, the price of a share of stock should drop by approximately the amount of the dividend on the:

   	a.	declaration date.
   	b.	record date.
   	c.	ex-dividend date.
   	d.	payment date.