A Potential Downfall of Using Dividends as the Plug Item

question 53

Multiple Choice

A potential downfall of using dividends as the plug item is that:

• A)It may give shareholders mixed signals
• B)Dividends are constant within a planning horizon
• C)The firm may have to borrow cash to pay dividends
• D)Shareholders may receive an excessive return

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Definitions:

Fromm

Refers to Erich Fromm, a psychoanalyst and social psychologist known for his theories on human nature, freedom, and society.

Frame Of Orientation

A term referring to an individual's structured way of perceiving and interpreting their world, often developed through cultural and social influences.

Fromm

Erich Fromm was a psychoanalyst and social psychologist who explored the interaction between psychology and society, focusing on themes like freedom, democracy, and human nature.

Fromm

Represents the ideas of Erich Fromm, focusing on the influence of society on personality development and the ways in which individuals express freedom and escape from freedom.