QUESTION 13

1. When a firm implements a stock split, what effect does the split have on the earnings per share (EPS) of the firm?

   	a.	EPS will rise initially before dropping.
   	b.	EPS will fall initially before rising to the old level.
   	c.	EPS will remain the same.
   	d.	EPS will rise.
   	e.	EPS will fall.

2 points

QUESTION 14

1. The cost of retained earnings can be estimated through the ____ approach.

   	a.	CAPM
   	b.	dividend growth
   	c.	MCC
   	d.	Both a & b
   	e.	All of the above

2 points

QUESTION 15

1. Retained earnings are:

   	a.	the only internally generated capital source.
   	b.	the least expensive source of capital because they're not subject to administrative expenses.
   	c.	free to the company because they come from ordinary operating earnings.
   	d.	All of the above