Indicate whether the following statements are true or false. If the statement is false, explain why. If a firm repurchases its stock in the open market, the shareholders who tender the stock are subject to capital gains taxes. If you own 100 shares in a company’s stock and the company’s stock splits two-for-one, you will own 200 shares in the company following the split. Some dividend reinvestment plans increase the amount of equity capital available to the firm. The Tax Code encourages companies to pay a large percentage of their net income in the form of dividends. If your company has established a clientele of investors who prefer large dividends, the company is unlikely to adopt a residual dividend policy. If a firm follows a residual dividend policy, holding all else constant, its dividend payout will tend to rise whenever the firm’s investment opportunities improve.

Which basic economic questions deals with the issue of how the incomeof people in various occupations is determined

Jennifer purchased a house in a brand new development in the outskirts of town. when her house was built, the nearest fire department was nearly 20 miles away. as her neighborhood developed, the density of the community called for a new fire department 1.5 miles away. what effect will the new fire station have on her homeowners insurance premium? a. a new fire department will be more demanding on local taxes. her annual premium will go up. b. the location of a fire department has no bearing on the value of her house. her annual premium will stay the same. c. the new fire department will reduce the risk of financial loss in her home. her annual premium should decrease. d. with a fire department so close (less than 5 miles), financial risk on jennifer’s home practically disappears. she will not need to pay insurance anymore.

Ummit record company is negotiating with two banks for a $157,000 loan. fidelity bank requires a compensating balance of 24 percent, discounts the loan, and wants to be paid back in four quarterly payments. southwest bank requires a compensating balance of 12 percent, does not discount the loan, but wants to be paid back in 12 monthly installments. the stated rate for both banks is 9 percent. compensating balances will be subtracted from the $157,000 in determining the available funds in part a. a-1. calculate the effective interest rate for fidelity bank and southwest bank. (do not round intermediate calculations. input your answers as a percent rounded to 2 decimal places.) a-2. which loan should summit accept? southwest bank fidelity bank b. recompute the effective cost of interest, assuming that summit ordinarily maintains $37,680 at each bank in deposits that will serve as compensating balances