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Emotional attachment to having control

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a) Non-voting share trade at a discount to voting shares. This is because investors have an emotional attachment to having control. True, False or Partially True? Explain.

b) It is generally better for raiders to go after public firms since the acquiring private firms requires a very high premium typically due to the power a single owner can have over them. True, False or Partially True? Explain.

c) Companies in countries where shareholders are endowed with strong rights, such as ease of takeovers and ability to demand extreme disclosure from management, typically pay higher dividend payout ratios. Please answer True/False/PartiallyTrue. Explain.

d) Acquirers can get better terms typically with stock deals since they are sharing the gains with the target shareholders; as a result, acquirers typically see their stock price perform better with stock deals than cash deals. Please answer True/False/PartiallyTrue. Explain.

e) When management decides to disgorge cash to shareholders, they should favor dividends over share repurchases since they are typically cheaper. Please answer True/False/PartiallyTrue. Explain.

f) When a company buys shares, their stock price increases. This is generally due to the fact that there are now fewer shares to divide the value over. Please answer True/False/PartiallyTrue. Explain.

Reference no: EM133003597

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