Government Intervention Is Necessary to Correct All Externalities

question 139

True/False

Government intervention is necessary to correct all externalities.

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Definitions:

Capital Budget

The process and plan for determining and allocating financial resources for major investments or projects within a company.

Payout Ratio

The proportion of earnings paid out as dividends to shareholders, often expressed as a percentage.

Dividend Policies

The policies and guidelines a company follows in deciding how much of its earnings it will pay out to shareholders as dividends.

Bird-In-The Hand

A theory suggesting that investors prefer dividends from a stock to potential capital gains because of the immediate certainty of receiving payouts.