1.) High dividends may increase stock values due to all of the following reasons EXCEPT

A.higher dividends are used to signal higher expected future earnings.

B.higher dividends allow companies to increase their proportion of external equity financing.

C.dividends are used as a tool to minimize agency costs.

D.dividends are more certain than capital gains.

2.) True or False? According to the moderate view of capital structure theory, the cost of common equity is constant regardless of the debt financing level.

a.) True

b.) False