A short-coming of the dividend discount model relative to the free cash flow to equity model is that:Group of answer choicesIt is not based on the time value of moneyIt only works for firms who have a lot of debtNot all firms pay dividendsIt only works for international firms

The Dividends Paid account: Group of answer choices normally has a credit balance. increases equity. is increased with debits and decreased with credits. is not a proper sub-account of equity.

Group of answer choicesearnings per share minus dividends per share.net income determined using generally accepted accounting principles.dividendscash flows.

Dividends paid: Group of answer choices increase assets. increase expenses. decrease revenues. decrease retained earnings.

Dividend policy of a firm is governed by:(i) Long Term Financing Decision:As we know that one of the financing options is ‘Equity’. Equity can either be raisedexternally through issue of new equity shares or can be generated internally throughretained earnings. For Equity, retained earnings are preferable because they do notinvolve any floatation costs (issue expenses).But whether to retain or distribute the profits, forms the basis of this decision.Further, payment of cash dividend reduces the amount of funds required to financeprofitable investment opportunities thereby restricting its financing options.In this backdrop, the decision is based on the following:1. Whether the organization has opportunities in hand to invest the profit,if retained?2. Whether the return on such investment (ROI) will be higher than theexpectations of shareholders i.e. Ke?

In the context of DDM, a dividend payout ratio equal to 100% implies that the equity value today will be equal to $0.Group of answer choicesTrueFalse