A Company Has Many Positive NPV Projects to Fund but Pays

question 32

Multiple Choice

A company has many positive NPV projects to fund but pays all of its profits as dividends. How could it continue to create shareholder wealth in Miller and Modigliani's perfect world?

• A) By issuing shares at low prices so that investors would pay for them
• B) By forgoing the projects
• C) By issuing shares, knowing that investors would willingly pay a fair price for them
• D) By not paying dividends in future years

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Definitions:

Skin Folds

Creases or wrinkles on the skin, often used as locations for measuring body fat percentage or as sites prone to irritation.

Perineal Care

Hygienic practices aimed at cleaning the genital and anal areas to prevent infection, often important in patient healthcare.

Urinary Incontinence

Inability to control urination.

Fecal Incontinence

Inability to control passage of feces and gas from the anus.