1) Asymmetric information implies that a decrease in dividends?

A) Signals the potential for higher growth in the future

B) Is a signal of a potential for poor performance In the future

c) Will potentially increase the free cash flow to the firm

2) The extended Dupont Formula provides more clarity than the simple Dupont formula because

A) It provides a cleaner view of profitability without the interest and tax effects.

B) It separates the profitability from the asset efficiency and the leverage effect.

C) It provides a cleaner view of the effect of debt in the capital structure by separating the interest and the leverage effect from the other factors relating to ROE.

3) The "bird in the hand" theory of dividends implies that investors would prefer

A) A lower dividend paid now rather than a promise of a higher dividend in the future.

B) A stock dividend now rather than a cash dividend later.

C) A stock dividend now in order to receive higher growth rate.