Which of the Following Should NOT Influence a Firm's Dividend

question 18

Multiple Choice

Which of the following should NOT influence a firm's dividend policy decision?

• A) The firm's ability to accelerate or delay investment projects.
• B) A strong preference by most shareholders for current cash income versus capital gains.
• C) Constraints imposed by the firm's bond indenture.
• D) The fact that much of the firm's equipment has been leased rather than bought and owned.
• E) The fact that Congress is considering changes in the tax law regarding the taxation of dividends versus capital gains.

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Definitions:

Transitive Ordering

A principle in decision-making that if option A is preferred over B, and B is preferred over C, then A is preferred over C.

Willingness To Pay

The maximum amount of money a consumer is prepared to spend to obtain a good or service.

Communications Network

A system of interconnected devices or nodes that can communicate with each other to exchange data and information.

Consumer Type

A classification of individuals based on their consumption patterns, preferences, or demographic characteristics.