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Do you agree or disagree with the following statements? Briefly explain why. (150 to 250 words each)
1- “In a world of no corporate or personal taxes, no agency costs or information asymmetries, a lower dividend payout will reduce a firms cost of capital.”
2- “Unlike new capital, which needs a stream of new dividends to service it, retained earnings have zero cost.”
3- “If a company repurchases stock instead of paying a dividend, the number of shares falls and earnings per share rise. Thus stock repurchase must always be preferred to paying dividends.”
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SUBJECTS / CATEGORIES:
1. Finance2. Financial Management3. Corporate Finance