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:

PCI Express

A high-speed interface standard used for connecting hardware devices within a computer, such as graphics cards and SSDs.

Desktop Computers

Desktop computers are personal computers designed for regular use at a single location on or near a desk due to their size and power requirements.

APIPA

Automatic Private Internet Protocol Addressing, a feature in Microsoft Windows that assigns a random IP address from the 169.254.0.1 to 169.254.255.254 range when a DHCP server is not available.

DHCP

Dynamic Host Configuration Protocol, a network management protocol used to automate the assignment of IP addresses.