The Manager of Montreal Trustco Has Noticed That as the Dividend

question 5

Multiple Choice

The manager of Montreal Trustco has noticed that as the dividend payout ratio of the firm increases the value of the firm's equity increases.This is most likely due to:

• A)The firm's return on equity is lower than the required return on equity
• B)The firm's return on equity is higher than the required return on equity
• C)The firm's return on equity is equal to the required return on equity
• D)None of the above is a likely explanation.

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Definitions:

Brain Activity

The electrical and biochemical actions within the brain, underlying both cognitive and physical functions.

Industrial-Organizational Psychologists

Psychologists who apply psychological theories and principles to workplace environments, aiming to improve productivity, working conditions, and employee well-being.

Workforce

The total number of a country's population employed in the armed forces and civilian jobs, plus those unemployed people who are actually seeking paid work.

Evolutionary Heritage

The traits and characteristics that have been passed down through generations as a result of evolutionary processes.