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.

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Definitions:

Barking

The sound a dog makes, often in response to excitement, threat, or communication needs.

Cat

A small domesticated carnivorous mammal with soft fur, a short snout, and retractile claws, often kept as a pet or for catching mice.

Road Construction

The process of building, maintaining, and repairing roads, including activities such as excavating, paving, and installing traffic management systems.

Navigate

To plan and direct the path or course of something, especially by using instruments or maps, or metaphorically to find one's way in life or a complex situation.