Montreal Skaters Company Has Cash Flow from Operations of $100

question 11

Multiple Choice

Montreal Skaters Company has cash flow from operations of $100 million.Usually it pays a total annual dividend of $100 million.In an M&M world, can reducing the dividend result in an increase in the value of the firm?

• A)No, according to M&M dividends are irrelevant so there should be no change in the value of the firm.
• B)No, in fact it will decrease value because shareholders like dividends more than capital gains.
• C)Yes, as long as the yield on the new investments the firm makes is greater than the return required by the shareholders.
• D)Yes, because shareholders like capital gains more than dividends.

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Definitions:

Closed-loop Supply Chains

Supply chains designed to integrate forward logistics with the reverse logistics process, enabling recycling, refurbishment, or disposal of products.

Reverse Logistics

The process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal.

Strategic Initiative

A comprehensive plan or set of actions aimed at achieving major goals and objectives within an organization or business.

Suppliers Cooperation

The collaborative efforts between companies and their suppliers to improve product quality, reduce costs, and enhance supply chain efficiency.