All of the following conclusions on the importance of a dividend policy are true EXCEPT
A) as a firm's investment opportunities increase, the dividend payout ratio should decrease.
B) in order to avoid surprising investors, management should anticipate financing needs for the
short-term, but not for the long term.
C) dividends may influence stock price by the investor's desire to minimize and/or defer taxes
and from the role of dividends in minimizing agency costs.
D) the firm's expected earning power and the riskiness of these earnings are more important to
the investor than the dividend policy.
B
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The 50th percentile female is 62.9 inches tall and should have a chair:
A) 15.7 inches high. B) 16.7 inches high. C) 17.7 inches high. D) 18.7 inches high. E) none of the above
Which of the following statements related to U.S. GAAP and IFRS is incorrect?
A. Both U.S. GAAP and IFRS include guidance for adjusting entries. B. Both U.S. GAAP and IFRS prepare the same four financial statements. C. IFRS balance sheets normally present noncurrent items first. D. U.S. GAAP balance sheets report current items first. E. U.S. GAAP does not require items to be separated by current and noncurrent classifications on the balance sheet.
A put option is purchased and held for 1 year. The Exercise price on the underlying asset is $40. If the current price of the asset is $36.45 and the future value of the original option premium is (-$1
62), what is the put profit, if any, at the end of the year? A) $1.62 B) $1.93 C) $3.55 D) $5.17
What is the recommended way of making volatility a function of time in a Cox, Ross, Rubinstein tree?
A. Make u a function of time B. Make p a function of time C. Make u and p a function of time D. Make the lengths of the time steps unequal