Which of the Following Statement Completions Is Correct? If Investors

question 27

Multiple Choice

Which of the following statement completions is correct? If investors prefer dividends to capital gains, then

• A)The equilibrium return, rs, will not be affected by a change in dividend policy because tax effects will offset these preferences.
• B)rs will decrease as dividends are reduced.
• C)rs will increase as dividends are reduced.
• D)rs will decrease as the retention rate increases.
• E)Dividend policy as determined by the residual dividend model is the only dividend policy which will maximize the price per share of common stock.

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Definitions:

Emotion Work

Effort expended to manage one's own emotions or the emotions of others to meet the emotional requirements of a job or social role.

Relative Importance

The degree of significance or emphasis given to something in relation to other factors or items in a specific context.

Produce An Emotion

The act or process of generating or evoking a feeling or response from oneself or others.

Individualistic Emotion

A type of emotional experience that is deeply personal, often reflecting the unique attitudes, values, and beliefs of an individual.