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:

Anxiety Level

The degree or intensity of feelings of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

Frustration-aggression Hypothesis

A psychological theory suggesting that aggression is often the result of frustration, which occurs when an individual's goal-directed behavior is blocked.

Aggressive Responses

Behaviors aimed at causing harm or injury to another person or object, often as a reaction to perceived threats or frustration.

Goal

An objective or desired outcome that an individual or group aims to achieve through purposeful action.