True or False:

1. Limited liability describes a situation where: the responsibility of shareholders for the companys debts is limited to the value of their personal wealth.

2. The immediate market reaction to cash dividend distribution is the companys stock declining.

3. By paying cash dividend, the true value per share of the firm decreases by the cash dividend amount per share.

4. Security and Exchange Commission (SEC) prohibit shortselling.

5. Shortsales allow the information to get into the stock price.

6. Shortselling is one of the mechanisms that keep the market efficient.

7. Shortsellers face limited downside risk of losing and unlimited upside reward of profiting.

8. Shortselling is a lot more riskier than regular buy and sell.

9. Shortsale deviates from the convention of buy low sell high.

10. Equity holders share firm's profit after bondholders.

11. In liquidation, equity holders claim firm's assets after all creditors.

12. Equity holders are last in line to other players in the firm, which undermines the incentive for business innovation.

13. Bondholders' upside potential in a firm's profit sharing is capped as opposed to equity holders.

14. NYSE is a primary market.

15. By Dividend Discount Model (DDM), if a company never ever pays any cash in the future, its stock should be worth zero.

16. Stocks that don't pay dividend, such as, Amazon, Google, Facebook, etc., still have huge value. This contradicts DDM model.

17. High growth stocks tend to have high valuation.

18. Federal Reserve hiking Interest rates will boost the stock market.

19. GE recently announced the news to cut future dividend. The plan hardly affects its current stock price.

20. Shareholder's total return comes from two sources only: dividend and capital gain.