One Possible Reason That Shareholders Often Insist on Higher Dividends

question 4

Multiple Choice

One possible reason that shareholders often insist on higher dividends is:

• A) They agree with Miller and Modigliani
• B) Tax consideration
• C) The stock market is efficient
• D) They do not trust managers to spend retained earnings wisely

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Definitions:

Organic Product

An organic product is a chemical substance or material produced as a result of organic chemistry, primarily involving carbon-based compounds.

Synthetic Steps

The individual reactions that occur in sequence during the synthesis of a compound.

Methylpropane

An alternative name for isobutane, a branched-chain hydrocarbon with the formula C4H10, found in natural gas and used as a refrigerant and a propellant.

Hydride Shift

A rearrangement reaction where a hydrogen atom, together with its bonding electrons, moves from one carbon to another within a carbon skeleton.