MM's Proposition of Dividend Irrelevance Depends Upon

question 67

Multiple Choice

MM's proposition of dividend irrelevance depends upon:

• A) firms maintaining a constant dividend payout.
• B) dividends being taxed the same as capital gains.
• C) the existence of a dividend clientele.
• D) the efficiency of capital markets.

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Definitions:

Fees Earned

The revenue a company generates from providing services during a given accounting period.

Salaries Expense

This refers to the total amount paid by a company for employee salaries over a specific period, recorded on the income statement.

Trial Balance

A bookkeeping worksheet listing the balances of all ledgers in two columns, debits and credits, used to verify the equality of the two totals.

Cash Dividend

A payment made by a company to its shareholders, typically in the form of cash, out of its profits or reserves.