Two Important Elements of the Dividend Policy Irrelevance Proposition Are

question 47

Multiple Choice

Two important elements of the dividend policy irrelevance proposition are:

• A) all investors have homogeneous dividend needs and time horizons.
• B) dividends are paid even if a positive NPV opportunity exists and investors can re-arrange their own dividend streams.
• C) investors can re-arrange their own dividend streams and the investment policy is set and unaltered by the change in dividend policy.
• D) all investors have homogeneous dividend needs and dividends are paid even if a positive NPV opportunity exists.
• E) investors can re-arrange their own dividend streams and the source of financing must be debt.

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Definitions:

Equilibrium Constant

A mathematical expression that relates the concentrations of reactants and products in a chemical reaction at equilibrium.

Ph

A measure that provides insight into the acidity or basicity level of an aqueous solution; values range from 0 (very acidic) to 14 (very basic).

Hemoglobin

A red protein responsible for transporting oxygen in the blood of vertebrates, its molecule comprises four subunits, each containing an iron atom.

Le Chatelier's Principle

A principle that states that if a system at equilibrium is subjected to a change in concentration, temperature, volume, or pressure, then the system adjusts to counteract that change and restore a new equilibrium.