Answer the following statements true (T) or false (F)
1. The liquidation value per share of common stock is the amount per share of common stock that would be received if all of a firm's assets were sold for their accounting value and the proceeds remaining were divided among common stockholders.
2. The book value per share of common stock is the amount per share of common stock that would be received if all of a firm's assets were sold for their accounting value and the proceeds remaining were divided among common stockholders.
3. Assuming that economic conditions remain stable, any management action that would cause current and prospective stockholders to raise their dividend expectations should decrease a firm's value.
4 The required return can be affected by changes in the risk free rate, even if the risk premium remains constant.
5. If the risk-free rate decreases due to a shift in government policy, the required return goes up.
1. FALSE
2. TRUE
3. FALSE
4. TRUE
5. FALSE
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A) If the smaller sum is paid before the due date of the larger debt. B) If an additional article or service is given together with the payment of the smaller sum. C) If the smaller sum is paid when the larger sum would ordinarily be due, but the debtor is on the verge of insolvency. D) A smaller sum is never able to discharge a larger debt.