"Cheap Talk" Is Considered Cheap Because

question 48

Multiple Choice

"Cheap talk" is considered cheap because

• A)communications via phone or email these days has a cost that is close to zero.
• B)a firm can say anything, but may actually do something different.
• C)the cost of talking is far outweighed by the gains to be made in coordinating efforts.
• D)firms avoid the costs of hiring lawyers.

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Definitions:

Required Return

The minimal yearly percentage increase essential to entice investment by individuals or companies into a certain project or security.

Per Share Dividend

The amount of dividend that is paid out for each share of a company's stock.

Dividend Increase

A rise in the amount of money paid to shareholders out of a company's earnings per share.

Annual Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits on a yearly basis.