Assuming a Perfect Market, a Corporation Can Create Value Only

question 60

Multiple Choice

Assuming a perfect market, a corporation can create value only by

• A)paying out dividends to its shareholders
• B)making changes to its capital structure
• C)splitting its stock
• D)None of the above actions will create value.

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Definitions:

Standard Error

A statistical measure that estimates the accuracy with which a sample distribution represents a population by using the standard deviation.

Sampling Error

The difference between a population parameter and a sample statistic that results from selecting a sample.

Expected Value

The predicted average outcome of a random variable, computed as the weighted average of all possible values.

Stratified Random Sampling

A probability sampling method in which the population is first divided into strata and a simple random sample is then taken from each stratum.