1. Which of the following factors would not tend to be associated with a firm having a low dividend payout ratio?
Low growth prospects
High floatation costs on new equity issues
High tax rates on dividends
2. Other things equal, which of the following provisions will increase the yield to maturity at which a firm can issue a bond?
The borrower has the option to repay the loan before maturity
The bond is convertible into shares
The lender has the option to sell the bond back to the issuer at a fixed price before maturity