The Fact That Flotation Costs Can Be Significant Is Justification

question 199

Multiple Choice

The fact that flotation costs can be significant is justification for:

• A) A firm to issue larger dividends than their closest competitors.
• B) A firm to maintain a constant dividend policy even if they frequently have to issue new shares of stock to do so.
• C) Maintaining a constant dividend policy even when profits decline significantly.
• D) Maintaining a high dividend policy.
• E) Maintaining a low dividend policy and rarely issuing extra dividends.

---

Definitions:

Risky Decisions

Choices made under conditions of uncertainty where the outcomes can include undesirable results, requiring the evaluation of potential risks and benefits.

Community Of Practice

Groups of people who share a concern or a passion for something they do and learn how to do it better as they interact regularly.

Formal

Pertaining to actions, events, or structures that are official, structured, and subject to rules or norms, often in contrast to informal counterparts.

Informal Groups

Social groups that form naturally within an organization, based on personal relationships and common interests, rather than being formally structured.