Choose the correct:

Q1:

Assuming a firm does not pay dividends and accumulates tax expense in a taxes payable account because tax is paid at a later period, which statement is correct if the tax rate increases?

A/ Gross profit margin will decrease

B/ X1 does not change

C/ Degree of operating leverage (DOL) will increase

D/ X3 does not change

Q2:

Which is an example of a future value annuity due?

A/ CF (1 + k)^2 + CF (1 + k)^1 + CF (1 + k)^0

B/ CF (1 + k)^3 + CF (1 + k)^2 + CF (1 + k)^1

C/ CF (1 + k)^3 + CF (1 + k)^2 + CF (1 + k)^1

D/ CF (1 + k)^2 + CF (1 + k)^1 + CF (1 + k)^0

Q3:

The dividend growth rate is equal to:

A/ One minus the dividend payout ratio

B/ ROE (return on equity) multiplied by the dividend payout ratio

C/ ROE (return on equity) assuming all earnings are paid as dividends

D/ (Anticipated dividend Current dividend) minus one