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True or False 1. Limited liability describes a situation where: the responsibility of shareholders for the...

True or False

1. Limited liability describes a situation where: the responsibility of shareholders for the company’s debts is limited to the value of their personal wealth.

2. The immediate market reaction to cash dividend distribution is the company’s stock declining.

3. By paying cash dividend, the true value per share of the firm decreases by the cash dividend amount per share.

4. Security and Exchange Commission (SEC) prohibit shortselling.

5. Shortsales allow the information to get into the stock price.

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