Homemade Dividends Are Described by Modigliani and Miller to Be

question 28

Multiple Choice

Homemade dividends are described by Modigliani and Miller to be:

• A) the dividend one pays oneself to avoid risky stocks.
• B) the re-arrangement of the firm's dividend stream as management needs.
• C) the re-arrangement of the firm's dividend stream by the investor in their holdings by buying or selling stock.
• D) the present value of all dividends to be paid.

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Definitions:

Deposits

Money placed into a bank account or financial institution for safekeeping, which can earn interest over time.

Money Market Mutual Funds

Investment funds that invest in short-term debt securities and aim to provide investors with liquidity and a modest rate of return.

Higher Interest Rates

An increase in the cost of borrowing money, often used by central banks to control inflation and stabilize the currency.

1970s

The decade extending from January 1, 1970, to December 31, 1979, noted for significant political, social, and economic events worldwide.