The Ability of Shareholders to Undo the Dividend Policy of the fiRm

question 278

Multiple Choice

The ability of shareholders to undo the dividend policy of the firm and create an alternative dividend payment policy via reinvesting dividends or selling shares of stock is called:

• A) Perfect foresight model.
• B) M&M Proposition I.
• C) Capital structure irrelevancy.
• D) Homemade leverage.
• E) Homemade dividend policy.

---

Definitions:

Cerebellum

Located at the skull's posterior, this brain area is vital for the regulation of movement, coordination, precise execution, and the timing of motor activities.

Hippocampus

A region of the brain that is associated with memory formation, organization, and storage.

Cerebral Cortex

The outer layer of the brain, vital for complex cognitive processes such as thought, memory, language, and consciousness.

Limbic System

A group of several brain structures located primarily under the cortex and involved in learning, emotion, memory, and motivation.