Suppose a Firm That Has Been Earning $2 and Paying

question 33

True/False

Suppose a firm that has been earning $2 and paying a dividend of $1.00,or a 50% dividend payout,announces that it is increasing the dividend to $1.50.The stock price then jumps from $20 to $30.Some people would argue that this is proof that investors prefer dividends to retained earnings.Miller and Modigliani would agree with this argument.

---

Definitions:

Deposition Transcripts

The official written records of sworn testimony taken outside of court in preparation for a trial.

Enforcing Court Judgments

The process of implementing or executing the orders issued by a court, ensuring that the decisions made are carried out.

Litigation

Litigation is the process of resolving disputes between parties through the court system.

Diagram

A simplified drawing or plan that represents facts, figures, or concepts in a visual form.