Dividends That Are Expected to Be Paid Far into the Future

question 42

Multiple Choice

Dividends that are expected to be paid far into the future have:

• A) great impact on current stock price due to their expected size.
• B) equal impact on current stock price as near-term dividends.
• C) lesser impact on current stock price due to discounting.
• D) no impact on current stock price because they are uncertain.

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Definitions:

Federal Energy Regulatory Commission

A U.S. federal agency that regulates the interstate transmission of electricity, natural gas, and oil.

Sherman Act

A landmark federal statute in the United States antitrust law passed by Congress in 1890 to prohibit monopolies and other activities that restrict competition.

Clayton Act

A U.S. antitrust law enacted in 1914, aimed at prohibiting specific business activities that lessen competition, such as price discrimination, exclusive dealings, and mergers that significantly reduce market competition.

Competitive Firms

Businesses that operate in markets where there are many buyers and sellers, and no single entity can control the price.