Question Details

A reverse split reduces the number of shares outstanding 



 .	If a firm adopts a residual distribution policy, distributions are determined as a residual after funding the capital budget.  Therefore, the better the firm's investment opportunities, the lower its payout ratio should be.

a.	True
b.	False

	
 .	Stock dividends and stock splits should, at least conceptually, have the same effect on shareholders’ wealth.

a.	True
b.	False

	
 .	A reverse split reduces the number of shares outstanding .

a.	True
b.	False

 .	Underlying the dividend irrelevance theory proposed by Miller and Modigliani is their argument that the value of the firm is determined only by its basic earning power and its business risk.

a.	True
b.	False

	
 .	One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be offset by a more than proportionate increase in growth in order to keep a firm's required return constant, other things held constant.

a.	True
b.	False




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