Asquith and Mullins Studied a Sample of Firms That Either

question 34

Essay

Asquith and Mullins studied a sample of firms that either paid their first ever cash dividend or initiated a dividend after a 10 year period of no dividends. Healey, Palepu and Michaely, and Thaler and Womack found stock prices to fall when dividends are. Explain how these positive and negative stock price results fit with the dividend irrelevance argument of MM and the opposing effects of taxes and current income needs on stock price if future earnings are held constant.

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Definitions:

Wellness

The active process of becoming aware of and making choices towards a healthy and fulfilling life, encompassing physical, mental, and social well-being.

Exercise Regularly

The practice of engaging in physical activity on a consistent basis to improve or maintain physical fitness and overall health.

Fatty Foods

Foods high in fat content, which can be saturated or unsaturated and are often linked to various health concerns when consumed in excess.

Responsibility

The state or fact of having a duty to deal with something or of having control over someone, often involving accountability.