Which of the Following Statements Is CORRECT

question 2

Multiple Choice

Which of the following statements is CORRECT?

• A) Firms with a lot of good investment opportunities and a relatively small amount of cash tend to have above average payout ratios.
• B) One advantage of the residual dividend policy is that it leads to a stable dividend payout, which investors like.
• C) An increase in the stock price when a company decreases its dividend is consistent with signaling theory as postulated by MM.
• D) If the "clientele effect" is correct, then for a company whose earnings fluctuate, a policy of paying a constant percentage of net income will probably maximize the stock price.
• E) Stock repurchases make the most sense at times when a company believes its stock is undervalued.

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Definitions:

Control Attention

The ability to maintain focus on relevant stimuli and manage one's attention in the face of distractions.

Immersion Approach

A teaching method primarily used in language education where students are placed in an environment where they must use the new language to learn it.

Dual Language Learning

The process by which individuals learn two languages simultaneously, often from an early age.

Bilingualism

The ability of an individual to use two languages effectively, often developed through exposure and practice from a young age.