1. The dividend yield is the cash dividend divided by the current market price of the stock.
True or False
2. The cash savings from reduced dividend payments resulting from a stock repurchase strategy can allow the company to increase its dividends for remaining shareholders
True or False
3. For the most downside protection, an investor should search for convertibles trading below par value near their floor value
True or False
4. Basic earnings per share include all convertible bonds outstanding.
True or False
5. "Basic earnings per share" does not include the dilutive effects of all of a firm's convertible bonds.
True or False
6. A warrant loses some of its financial leverage when the stock rises far above the exercise price.
True or False
7. Investors will generally choose the call price rather than the shares of stock during a forced conversion
True or False
8. The portfolio effect of a merger is greatest for the stockholders of the firm being acquired.
True or False
9. Antitrust policy can preclude the acquisition of a competitor.
True or False
10. In a horizontal merger, the integration that occurs comes from acquiring companies that supply resources to the company's production process.
True or False
11. While a horizontal merger may improve profitability, it will not necessarily reduce the portfolio risk of the acquiring company.
True or False