Dividend Policy Can Affect the Value of the Firm for Which

question 19

Multiple Choice

Dividend policy can affect the value of the firm for which of the following reasons?

• A) Personal taxes
• B) Flotation costs
• C) Shareholder transaction costs
• D) All of these are correct

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Definitions:

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Discounted Cash Flow (DCF)

A valuation method used to estimate the value of an investment based on its future cash flows, adjusted for the time value of money.

Capital Budgeting Techniques

Methods used to evaluate and prioritize investment projects or expenditures, such as NPV, IRR, Payback Period, and Profitability Index.

Small Businesses

Enterprises characterized by a small number of employees, limited revenue, and size within their industry.