Which of the Following Statements Is FALSE

question 65

Multiple Choice

Which of the following statements is FALSE?

• A)In perfect capital markets,holding fixed the investment policy of a firm,the firm's choice of dividend policy is irrelevant and does not affect the initial share price.
• B)In a perfect capital market,when a dividend is paid,the share price drops by the amount of the dividend when the stock begins to trade ex-dividend.
• C)In perfect capital markets,an open market share repurchase has no effect on the stock price,and the stock price is the same as the ex-dividend price if a dividend were paid instead.
• D)In perfect capital markets,investors are indifferent between the firm distributing funds via dividends or share repurchases.By reinvesting dividends or selling shares,they can replicate either payout method on their own.

Identify and calculate fixed and variable production costs.

Recognize the concept and implications of diminishing returns to labor.

Determine the conditions under which a firm operates at the minimum point of average total cost (ATC).

Understand the concepts of economies and diseconomies of scale and their relationship with the cost curves.

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Definitions:

Duty of Fair Representation

The legal obligation of a union to represent all members fairly, without bias or discrimination.

Collective Bargaining

The process in which working people, through their unions, negotiate contracts with their employers to determine their terms of employment.

Arbitrating

The process of settling a dispute through an impartial third party, whose decision is usually binding.

Negotiations

The process of discussing terms between two or more parties to reach a mutual agreement or resolve a conflict.