1. Which of the following is true?
Many large U.S corporations have more sales and profits in foreign companies than in the U.S.
The U.S. has lower corporate taxes than most other industrialized nations.
Legally, a U.S. corporation must have the majority of its sales in the U.S.
Globalization has harmed the sales of most U.S. corporations.
2. From the list below, select all the statements about payout policy that are correct.
1. Most of the practical differences between share repurchases and dividends is due to taxes and transaction costs.
2. Payouts--whether they are dividends or share repurchases--are irrelevant.
3. Share repurchases artificially inflate the market value of the firm, relative to common dividends, and are thus are mostly banned by the SEC as a form of stock manipulation.
4. Never paying dividends or conducting share repurchases can make agency conflicts worse by leaving more cash in the firm for management to waste.
5. Financial markets often interpret changes in payout policy as a signal from management about the firm's current and future performance.
3. Share repurchases and dividends have essentially identical effects on a firm's balance sheet, differing only in which equity accounts that affect.
True or False