Which of the Following Statements Is True

question 64

Multiple Choice

Which of the following statements is true?

• A) The quick ratio is classified as an activity ratio.
• B) Current assets are expected to be converted into cash in less than 2 years.
• C) A firm's debt holders prefer a low quick ratio.
• D) Activity ratios go hand in hand with liquidity ratios
• E) Lower current ratios are always preferable.

Comprehend the factors influencing a firm's dividend policy, including legal, contractual, and internal constraints.

Analyze the impact of dividend changes on stock prices and shareholder wealth.

Recognize the role of transaction costs and taxes in dividend policies and their effects on shareholder value.

Understand the role of the board of directors in dividend policy decisions and the legal framework governing dividends.

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