Indicate whether the following statements are true or false. If the statementis false, explain why.c. Some dividend reinvestment plans increase the amount of equity capitalavailable to the firm.
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Indicate whether the following statements are true or false. If the statement
is false, explain why.
c. Some dividend reinvestment plans increase the amount of equity capital
available to the firm.
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- The cost of capital can be thought of as the rate of return required by investors in the firm's securities. O a. false O b. trueWhich of these would best improve a firm's liquidity position? *a. Lower profitabilityb. Higher capital spendingc. Higher need for noncash current assets on the balance sheetd. Declaration of stock dividendsIndicate whether the following statement is true or false. Provide the relevant explanations. The higher the proportion of equity in a company’s overall capital structure, the higher return required by its debtholders. (Explain your reasoning – in your explanation, provide a numerical example supporting your answer.)
- What benefits is available to investors in a dividend reinvestment plan? How might the firm benefit?Which of the following would likely increase return on equity (ROE)? a. Cutting operating costs b. Raising the dividend c. Increasing the firm's business risk d. Lowering the debtA working capital financing policy that finances almost all assets with long-term capital a. Restricted Policy b. Dividend Policy c. Hedging Policy d. Relaxed Policy It is generally assumed that the greater the firm’s net working capital, the higher its risk. True False
- The cost of equity is ________. Group of answer choices A. the interest associated with debt B. the rate of return required by investors to incentivize them to invest in a company C. the weighted average cost of capital D. equal to the amount of asset turnoverWhen a firm conducts a seasoned equity offering and uses the proceeds to purchase a portion of the firm's outstanding debt, then the firm's Group of answer choices business risk increases. financial risk decreases. financial risk increases. business risk increases.In Business Finance, we observe a shareholder's required return on a common stock investment because O it is used to predict the cashflows from a capital expansion O it is inversely related to the same firm's bond price O it is an estimate of the cost of equity funding for a corporation O it is the cost of borrowing for the firm K
- Earnings can be paid out in dividends or retained by the firm to finance ongoing productive activities. Group of answer choices True FalseIndicate whether the following statements are true or false. If the statementis false, explain why.f. If a firm follows a residual dividend policy then, holding all else constant, its dividend payout will tend to rise whenever the firm’s investment opportunities improve.WoeBeTide's chief objective is to meet its investment needs and maintain its target debt-equity ratio before paying dividends. WoeBeTide is following a dividend approach. Select one: a. cyclical b. stable C. compromise d. residual e. stochastic