The Manager of XYZ Corp

question 76

Multiple Choice

The manager of XYZ Corp.feels that a dividend increase will increase stock price because many investors value stock with a dividend-discount model.Why might MM disagree with this assertion?

• A)the increased dividend makes the firm much riskier.
• B)future dividend growth may slow due to less retained earnings.
• C)investors prefer capital gains over dividends.
• D)dividend increases will increase the book value but not the market value of the firm.

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Definitions:

Horizontal Channels

Communication or distribution channels that move among entities at the same level within organizations.

Impersonal Communication

Communication that lacks personal warmth or intimacy, often characterized by formal, objective, and distant interactions.

Interpersonal Communication

The exchange of information, thoughts, and feelings between two or more people through verbal or non-verbal methods.

Enterprise Social Networks

Online platforms that enable employees within an organization to collaborate, share information, and strengthen professional relationships.