For a large public company, paying cash dividends to shareholders will ____; repurchasing shares from shareholders is likely to _____. Group of answer choices a. reduce the company’s share price because it decreases the company’s total asset value; reduce the company’s share price because it decreases the company’s asset value b. reduce the company’s share price because it decreases the company’s asset value; raise the company’s share price because it signals good news to the stock market c. reduce the company’s share price because it decreases the company’s asset value; raise the company’s share price because it reduces the number of shares outstanding d. raise the company’s share price because it sends good signal to the stock market; raise the company’s share price because it reduces the outstanding shares number

True or False: The following statement accurately describes how firms make decisions related to issuing new common stock. Taking flotation costs into account will reduce the cost of new common stock. False: Flotation costs are additional costs associated with raising new common stock. True: Taking flotation costs into account will reduce the cost of new common stock, because you will multiply the cost of new common stock by 1 minus the flotation cost-similar to how the after-tax cost of debt is calculated Alpha Moose Transporters is considering investing in a one-year project that requires an initial investment of $475,000. To do so, it will have issue new common stock and will incur a flotation cost of 2.00%. At the end of the year, the project is expected to produce a cash inflow of $550,000. The rate of return that Alpha Moose expects to earn on its project (net of its flotation costs) is (rounded to two decimal places) Sunny Day Manufacturing Company has a current stock price of…

4. Classify each of the following factors/cases based on whether they favor a low dividend policy or high dividend policy? (explain why) A. The tax on capital gains is deferred until the gain is realized. B. Few, if any, positive net present value projects are available to a firm. C. A majority of the shareholders have a low tax rate. D. A majority of the shareholders have better investment opportunities than the firm. E The presence of an agency conflict with the company's senior managers.

Suppose managers of a firm know that the company is approaching financial distress. Should the managers borrow from creditors and issue a large one-time dividend to shareholders? How might creditors control this potential transfer of wealth?

Explain why the following statement is wrong (1 paragraph maximum): "The main reason why some companies prefer to return cash to shareholders through stock repurchases, rather than dividends, is because repurchases reduce the number of share outstanding and thus tend to increase the stock price."