For a Firm to Develop a Sensible, Useful Dividend Policy

question 4

Multiple Choice

For a firm to develop a sensible, useful dividend policy, the three things that should be considered are:

• A) dividends should not be paid if positive NPV projects are available, stock should always be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.
• B) dividends should not be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if no positive NPV projects exist.
• C) dividends should be paid if positive NPV projects are available, stock should always be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.
• D) dividends should be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if no positive NPV projects exist.
• E) dividends should not be paid if positive NPV projects are available, stock should always not be issued to pay dividends, repurchases with surplus cash should be considered if positive NPV projects exist.

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Definitions:

Ethological Theory

A perspective in psychology that emphasizes the genetic and evolutionary mechanisms behind behaviors and how they contribute to survival.

Biological Basis

The foundation of behaviors, abilities, or diseases in genetic, neurological, or physiological processes within the body.

Skinnerian

Relating to the theories of B.F. Skinner, emphasizing behaviorism and the use of reinforcement to modify behavior.

Aggressive Behavior

Actions intended to cause harm or pain to others, often driven by anger or hostility.