Which of the following are true concerning dividend reinvestment plans? ​1. taxes are deferred 2. they offer stockholders a convenient means to save 3. the firm may pay the brokerage and other fees associated with the plans

​Over‑estimation of the required level of assets will 1. cause the firm to acquire excess finance 2. reduce the firm’s profitability 3. increase the firm’s equity

The marginal cost of capital rises​ 1. because the cost of retained earnings exceeds the cost of new shares2. because the cost of new shares exceeds the cost of retained earnings3. if the firm issues secured debt instead of debentures4. if the firm issues debentures instead of secured debt

The internal rate of return of an investment is independent of the firm’s cost of capital.​

The marginal cost of capital rises​ 1. because the cost of retained earnings exceeds the cost of new shares2. because the cost of new shares exceeds the cost of retained earnings3. if the firm issues secured debt instead of debentures4. if the firm issues debentures instead of secured debt

If the cost of capital rises, an investment’s internal rate of return falls.​

Dividend reinvestment plans permit stockholders to defer income taxes on dividends.​

The internal rate of return assumes that cash inflows are reinvested at the firm’s cost of capital.​

If the cost of capital rises, an investment’s internal rate of return falls.​

Dividend reinvestment plans permit stockholders to defer income taxes on dividends.​