1. We discussed the Bird –in- the- Hand Theory on dividend payouts. If this theory holds, then the market will reward firms that:
Have a high dividend yield
Have a low dividend yield
Equally regardless of dividend yield
None of the answers are correct
2. The free cash flow-to-equity method uses:
I) cash flows to equity, after interest and after taxes;
II) the cost of equity capital as the discount rate;
III) the weighted average cost of capital for discount rate;
IV) after-tax cash flows without considering interest and dividend payments
II and IV only
I and II only
II and III only
I and III only
I and IV only