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Harvard University Operations And Supply Chain Management Assignment Help - Capital Structure

Question - 1. If investors prefer firms that retain most of their earnings, then a firm that wants to maximize its
stock price should set a low payout ratio. A) True B) False
2. If a firm adopts a residual distribution policy, distributions are determined as a residual after funding
the capital budget. Therefore, the better the firm's investment opportunities, the lower its payout ratio
should be. A) True B) False
3. Stock dividends and stock splits should, at least conceptually, have the same effect on
shareholders wealth. A) True B) False
4. Blease Inc. has a capital budget of $625,000, and it wants to maintain a target capital structure of
60% debt and 40% equity. The company forecasts a net income of $475,000. If it follows the residua ...Read More

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