True or false questions

12 13 14 , 15-1 1. Limited liability describes a situation where: the responsibility of shareholders for the company's debts is limited to the value of their personal wealth. 2. The immediate market reaction to cash dividend distribution is the company's 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 short selling 5. Short sales allow the information to get into the stock price. 6. Short selling is one of the mechanisms that keep the market efficient 7. Short sellers face limited downside risk of losing and unlimited upside reward of profiting. 8. Short selling is a lot more riskier than regular 'buy and sell' 9. Short sale 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 I 6. Stocks that don'tna v dividend suchas Amazon 00ple Facebook ete tillhave huge 4