Which of the Following Statements Is Correct

question 2

Multiple Choice

Which of the following statements is correct?

• A) If a company has an established clientele of investors who prefer a high dividend payout, and if management wants to keep stockholders happy, it should not follow the strict residual dividend policy.
• B) If a firm follows a strict residual dividend policy, then, holding all else constant, its dividend payout ratio will tend to rise whenever the firm's investment opportunities improve.
• C) If Congress eliminates taxes on capital gains but leaves the personal tax rate on dividends unchanged, this would motivate companies to increase their dividend payout ratios.
• D) Despite its drawbacks, following the residual dividend policy will tend to stabilize actual cash dividends, and this will make it easier for firms to attract a clientele that prefers high dividends, such as retirees.
• E) One advantage of dividend reinvestment plans is that they enable investors to avoid paying taxes on the dividends they receive.

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Definitions:

Request An Interview

A formal or informal appeal to conduct a meeting in which questions are asked and answers are given, often for the purpose of obtaining information or for employment purposes.

Contact Information

Details used to communicate with an individual or organization, such as phone number, email address, or physical address.

Application Letters

Written communications submitted by job seekers to employers, expressing interest in a position and highlighting qualifications.

AIDA Approach

A marketing model that stands for Attention, Interest, Desire, and Action, used to guide the process of advertising or selling.