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.

---

Definitions:

Congressional Radicalism

Refers to the period during and after the Civil War where certain members of the U.S. Congress advocated for drastic, progressive reforms including significant civil rights measures for freed slaves.

Political Participation

The involvement of individuals in political activities, such as voting, campaigning, or engaging in public discussions, to influence the decision-making process.

Robert Brown Elliott

A prominent African American politician and lawyer in the United States during the Reconstruction era.

Congressional Radicalism

Refers to a period during Reconstruction in the United States when the Radical Republicans in Congress implemented severe measures to protect the rights of newly freed African Americans and to reform Southern states.