Which of the Following Statements Is True

question 39

Multiple Choice

Which of the following statements is true?

• A)On average, an announcement by a firm's board of directors that they will continue with their current dividend policy has no effect on the price of the stock.
• B)Only the announcement that a firm will begin paying dividends for the first time has any effect on a stock's price.
• C)On average, an announcement of an increase in dividend yields of 10 or more basis points results in a relatively large price increase.
• D)Both A and C are true statements.

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Definitions:

Average Fixed Costs

The fixed costs of production (costs that do not change with the level of output) divided by the number of units produced.

Drones

Unmanned aerial vehicles or aircraft systems operated by remote control or onboard computers.

Drone

An unmanned aerial vehicle (UAV) operated by remote control or onboard computers, used for various purposes including photography, surveillance, and recreation.

Average Variable Costs

The sum of all costs that vary with output levels, when divided by the number of units produced.