Tatim executed a 3-for-1 stock split. you would expect that the value of a investment in the firm should increase because having 3 stocks is clearly better than i. b. each new stock should be approximately 3 times the value of the original stock c. each new stock should be approximately equal to the value of the original sto d. each new stock should be approximately one-third of the value of the original SOGN e. all of the above would be essentially equally probable outcomes 55 Which of the following securities would be expected to have more nisk on avons xpected to have more risk on average than the market? a. security A, whose Beta is 0.8 b. security B, whose Beta is 1.0 c. security C, whose Beta is 1.3 d. security D, whose standard deviation is 35% e insufficient information to predict since none of these measures indicate risk relative to the market. 56 According to the Miller and Modigliani view of capital structure in a world with corporate taxes (M&M, 1963, aka corporate tax view), which of the following statements are true? a. debt provides no value b. debt increases firm value most for tax-exempt organizations since they avoid the tax on debt value c. the value of a levered firm is generally less than the value of an unlevered firm due to the debt tax shield d. the value of a levered firm may be greater than the value of an unlevered firm due to the debt tax shield e. none of the above 57 Regarding dividend policy and dividend payment dates: All else the same, on the ex-dividend date, one would expect the stock's price... a. to increase, since the firm is paying a dividend b. to increase, since the dividend will not be taxed when it is 'ex-dividend' c. to not change, since the dividend was previously declared d. to decrease, since after the ex-dividend date, the buyer will not receive the dividend e. to decrease, since ex-dividend means the dividend has been cancelled 58. Buying a put option would protect you from a. The price of the underlying asset rising. b. The price of the underlying asset falling. C. Having to buy the underlying asset at a higher price in the future. d. None of the above