Which of the Following Statements Is Most Correct

question 6

Multiple Choice

Which of the following statements is most correct?

• A) The tax preference hypothesis suggests that companies can reduce their costs of capital by increasing their dividend payout ratios.
• B) One advantage of the residual distribution policy (with all distributions as dividends) is that it leads to a stable dividend payout, which is desired by investors.
• C) Firms with a large number of investment opportunities and a relatively small amount of cash tend to have above average dividend payouts.
• D) Answers a and b are correct.
• E) None of the answers above is correct.

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Definitions:

Erikson's

Relates to the theories of developmental psychologist Erik Erikson, focusing on psychosocial development across eight stages from infancy to adulthood.

Freud's

Pertains to theories or concepts developed by Sigmund Freud, often related to psychoanalytic theory and the unconscious mind.

Identity Crisis

A period of uncertainty and confusion in an individual’s life when one's sense of identity becomes insecure, typically due to a change in their expected aims or role in society.

Role Confusion

A situation where an individual is unsure about the expectations of a particular role they are to play in society, often leading to a sense of uncertainty about their identity.