Which of the Following Is NOT Accurate Regarding Corporate Dividends

question 110

Multiple Choice

Which of the following is NOT accurate regarding corporate dividends?

• A) Once declared, a dividend becomes a liability of the firm.
• B) The value of a firm's stock is ultimately determined by its dividend policy.
• C) The existence of an information content effect tends to make it difficult to determine the effects of dividend policy.
• D) In the absence of a more favourable tax rate on cash dividends, investors will prefer stocks with relatively low dividend payout rates.
• E) Dividend stability is usually viewed as a desirable objective.

---

Definitions:

Intentionally Confuse

The act of deliberately making something difficult to understand or interpret, often used as a strategy to mislead or manipulate others.

Surrogate Lying

Involves making false statements or misleading claims on behalf of someone else, often to protect them or advance a mutual interest.

Social Relationships

The connections and interactions between individuals or groups within a society, shaping behavior, culture, and social structure.

Reciprocity

A principle or practice of mutual exchange and interdependence often considered in social, economic, and ethical contexts.