1. Which of the following statements is false?

1) the total payout model allows us to ignore the firm's choice between dividends and share repurchases

2) by repurchasing shares, the firm increases its share count, which decreases its earnings and dividends on a per-share basis

3) the total payout model discounts the total paypouts that the firm makes to shareholders, which is the total amount spent on both dividends ans share repurchases

4) in the dividend discount model we implicitly assume that any cash paid out to the shareholders takes the form of a dividend.

2. which of ther following statements is false?

1) as firms mature, their earnings exceed their investment needs and they begin to pay dividends

2) total returns equals earnings multiplied by the dividend payout rate

3) cutting the firms dividend to increase investment will raise the stock price if, and only if, the new investments have a positive NPV

4) we cannot use the constant dividend growth model to value the stock of a firm with rapid or changing growth.