Which of the Following Is Not an Example of Market

question 68

Multiple Choice

Which of the following is not an example of market imperfections that make dividend policy relevant?

• A)institutional restrictions on stock holdings
• B)differences in dividend-payout ratios
• C)transaction costs such as brokerage fees
• D)differences among investors in marginal tax rates

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Definitions:

Term to Maturity

Term to Maturity is the remaining time until a debt instrument, such as a bond, reaches its due date and the principal must be repaid.

Debentures

Long-term securities issued by companies to borrow money, often with a fixed rate of interest.

Mortgage Bonds

Bonds secured by real estate or physical equipment that can be sold in case the bond issuer defaults.

Individual Investors

Private individuals who invest their own money in various financial instruments, such as stocks, bonds, or real estate, aiming to achieve personal financial goals.