Which of the Following Statements Is Correct

question 38

Multiple Choice

Which of the following statements is correct?

• A) The optimal dividend policy is the one that satisfies the shareholders because they supply the firm's capital.
• B) The use of debt financing has no effect on earnings per share (EPS) or share price.
• C) The riskiness of projected EPS depends upon how the firm is financed.
• D) Share price is dependent on the projected EPS and the use of debt but not on the timing of the earnings stream.
• E) Dividend policy is one aspect of the firm's financial policy that is determined directly by the shareholders.

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Definitions:

Organic-rich Black Shale

Sedimentary rocks that contain high amounts of organic matter, typically appearing dark in color, and are potentially sources of fossil fuels.

Silica-rich Creatures

Marine organisms that have skeletons made primarily of silica, such as diatoms and certain types of sponges.

Gradational Boundaries

Transition zones where different geological formations or ecosystems meet and blend without a clear-cut separation.

Sedimentary Rock

Rock formed by the deposition of material at the Earth's surface and within bodies of water, characterized by distinct layers.