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.

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Definitions:

Planning

The process of setting objectives and determining the most effective course of action to achieve them.

Assault

The act of inflicting physical harm or unwanted physical contact upon another person.

Friendly

Characterized by kindness, warmth, and approachability; showing friendship or amicability.

Helpful Woman

A female individual who provides assistance, support, or aid to others.