7) A basic consequence of Miller-Modiglianis dividend theory is that

a.every shareholder can create their own dividend policy.

b.transaction costs are irrelevant.

c.companies should pay out dividends.

d.companies should not pay out dividends.

8) Based on the so-called Bird-in-Hand theory it can be concluded that:

a.Shareholders prefer that companies have high retained earnings.

b.Managers should invest in projects that promise a high return.

c.Companies should pay out dividends.

d.Shareholders do not pay attention to the WACC.

4) Which of the following actions will best enable a company to raise additional equity capital, other things held constant? A. Announce a higher dividend payment in the future. B. Declare a stock split. C. Lower their dividend pay-out fatio. D. End a stock repurchase program