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.

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Definitions:

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brainstem to the lower back, functioning in transmitting neural signals between the brain and the rest of the body.

Spinal Cord

The major bundle of nerves running down from the brain through the spinal column, transmitting nerve signals between the brain and the body.

Sensory Information

Data received by sensory receptors that inform an organism about its environment or internal condition.

Cerebral Cortex

The outer layer of the brain involved in complex cognitive processes like thinking, perception, and decision-making.