A Company Announces a Change in Its Dividend Policy from a Zero

question 14

True/False

a company announces a change in its dividend policy from a zero target payout ratio to a 100% payout policy, this action could be expected to increase the value of long-term options (say 5-year options) on the firm's stock.

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Definitions:

Euro

The official currency of the eurozone, which is a monetary union of 19 of the 27 European Union member states.

American Dollars

The currency of the United States, widely used as a benchmark and reserve currency around the world.

Exchange Rate Gain

A profit resulting from a favorable change in the exchange rate between two currencies.

British Pound

The currency of the United Kingdom, symbolized as GBP, and one of the world's major currencies traded on foreign exchange markets.