Which One of the Following Statements Is Correct

question 24

Multiple Choice

Which one of the following statements is correct?

• A)Firms prefer to cut dividend payments rather than borrow money to fund a short-term cash need.
• B)Share repurchases tend to increase agency costs.
• C)Maintaining a steady dividend is a key goal of most dividend-paying firms.
• D)Tax rates are the key factor in determining a firm's dividend policy.
• E)Stock prices tend to ignore expected changes in dividend payments.

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Definitions:

Production Possibility Frontier

A graphical representation that shows the maximum quantity of two goods or services that a society can produce given fixed resources and technology, assuming all resources are fully employed.

Technological Improvement

Advancements or enhancements in technology that increase efficiency, productivity, or bring new capabilities to businesses, industries, or consumer products.

Wheat

A cereal grain that is a staple food in many parts of the world, used to make flour for bread, pasta, pastry, and other foods.

Fly-fishing Rods

Specialty fishing equipment designed for fly fishing, characterized by a long, flexible rod used to cast artificial flies as bait to catch fish.