Which One of the Following Statements Related to Dividend Policy

question 20

Multiple Choice

Which one of the following statements related to dividend policy is correct?

• A) The primary question related to dividend policy is whether or not a dividend should ever be paid.
• B) Both dividends and dividend policy are irrelevant.
• C) Dividend policy focuses on the timing of dividend payments.
• D) Homemade dividends increase the importance of a company's dividend policy decisions.
• E) Whether or not a company ever pays a dividend is irrelevant to equity valuation.

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Definitions:

Transfer Ownership

The act of moving legal title and rights from one entity or person to another.

Capital Budgeting

Capital budgeting is the process by which companies evaluate and prioritize investments in long-term assets and projects based on potential returns and strategic goals.

Long-Term Investments

Investments held for an extended period, typically exceeding one year, intended for growth, income, or both.

Planning

The process of setting goals, establishing strategies, and outlining tasks and schedules to achieve these goals.