Shareholders wealth will decrease if:

	a.	The firm earns positive earnings on shareholders equity below those required by shareholders
	b.	The firm earns negative residual earnings on shareholders equity
	c.	a & b
	d.	The firm earns a return on shareholders' equity greater than what they require
	e.	None of the above

The problem(s) with the dividend discount model (DDM) is that it:

	a.	Does not capture the value added
	b.	Ignores capital gain component of return
	c.	May require forecast for long periods
	d.	All the above
	e.	None of the above

If the interest on notes payable is lower than the market interest rate, the firm should treat them as:

	a.	Operating assets
	b.	Financial assets
	c.	Operating liabilities
	d.	Financial liabilities
	e.	none of the above

The value of property, plant and equipment (PPE) reported on the balance sheet could be manipulated using many methods. Which of the following methods has/have the effect(s) of improving future years' earnings?

	a.	Capitalising repairs and maintenance expense to PPE in the current year.
	b.	Increasing the estimated lives or salvage values of PPEs by the end of the current year.
	c.	Charging excessive impairment charges to PPEs in the current year.
	d.	all the above
	e.	b and c