Which of the following is not true regarding firms use of net assets (assets minus liabilities)?
a. Firms use net assets to generate more net assets through the earnings
b. Firms typically retain some or all of the net assets generated by earnings, causing net assets to increase, along with retained earnings, which is the component of shareholders' equity showing the cause of that increase in net assets.
c. The retention of net assets generated by earnings generally increases the market price of the firm's common shares.
d. Some firms pay periodic dividends to the common shareholders out of net assets.
e. Regardless of whether a firm has more than one class of common stock and their dividend rights differ, each common shareholder always receives the same dividend per share as all other common shareholders.
E
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