The Fact That Flotation Costs Can Be Significant Is an Argument

question 7

Multiple Choice

The fact that flotation costs can be significant is an argument for:

• A) issuing larger regular dividends than the industry norm.
• B) maintaining a constant dividend policy even if the firm frequently has to issue new shares.
• C) periodic extra dividend payments.
• D) maintaining a constant dividend policy even when profits decline significantly.
• E) maintaining a low dividend policy and rarely issuing extra dividends.

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Definitions:

Groupthink

A mental effect experienced by a group, where the longing for agreement or compliance leads to illogical or ineffective decisions.

Illusion of Popularity

A perception phenomenon where individuals overestimate the extent to which they are liked or accepted by others.

Bad Apple

A term referring to an individual within a group or team who negatively influences the whole, often contributing to toxic environments or fostering negativity.

Groupthink

A phenomenon in group decision-making processes where the desire for harmony or conformity results in an irrational or dysfunctional outcome.