20.In a "frictionless"financial environment,the shareholders wealth is the dividend policy the firm adopts. (a)increased by (b)decreased by (c)not affected by (d)determined by Answer:(c) 21.Ina the company pays cash to buy shares of its stock in the stock market,thereby reducing the number of shares outstanding. (a)cash dividend (b)share repurchase (c)stock split (d)a and b Answer:(b) 22.Stock splits and stock dividends the number of shares of stock outstanding (a)decrease (b)do not alter (c)increase (d)aor b Answer:(c) 23.SureBet Corporation has total assets with a market value of $15 million:$3 million in cash and $12 million in other assets.The market value of its debt is $3 million;of its equity $12 million.There are 1,000,000 shares of SureBet common stock outstanding,each with a market price of $12.If SureBet distributes a cash dividend of $1.50 per share,the market value of its assets and of its equity by (a)increases;$1.5 million (b)increases;$10.5 million (c)decreases;$1.5 million (d)decreases;$10.5 million Answer:(c) 9-69-6 20. In a “frictionless” financial environment, the shareholders wealth is ________ the dividend policy the firm adopts. (a) increased by (b) decreased by (c) not affected by (d) determined by Answer: (c) 21. In a ________ the company pays cash to buy shares of its stock in the stock market, thereby reducing the number of shares outstanding. (a) cash dividend (b) share repurchase (c) stock split (d) a and b Answer: (b) 22. Stock splits and stock dividends ________ the number of shares of stock outstanding. (a) decrease (b) do not alter (c) increase (d) a or b Answer: (c) 23. SureBet Corporation has total assets with a market value of $15 million: $3 million in cash and $12 million in other assets. The market value of its debt is $3 million; of its equity $12 million. There are 1,000,000 shares of SureBet common stock outstanding, each with a market price of $12. If SureBet distributes a cash dividend of $1.50 per share, the market value of its assets and of its equity ________ by ________. (a) increases; $1.5 million (b) increases; $10.5 million (c) decreases; $1.5 million (d) decreases; $10.5 million Answer: (c)