1.When EBIT is positive, increasing financial leverage increases the sensitivity of EPS and ROE to changes in EBIT.

True or False

2. A reverse split is a situation where there is an increase in a firm's shares outstanding without any change in owner's equity.

True or False

3.A stock split is a situation where a firm's number of shares outstanding is reduced. True or False

4. An example of the existence of an information content effect of dividends is when Telus's share price drops by 33% after it announces it is omitting its regular quarterly dividend payment.

True or False

5. Homemade dividends is the belief that individual investors can undo corporate dividend policy by reinvesting dividends or selling shares of stock.

True or False