Shareholders May Prefer Dividends to Reinvestment by the Firm

question 55

Multiple Choice

Shareholders may prefer dividends to reinvestment by the firm:

• A) because dividends payments are certainty every year.
• B) because dividend payments have an information content.
• C) because investors may prefer future cash to current cash.
• D) because the firm can earn higher returns than the shareholder.

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Definitions:

Schizophrenia

A long-term mental disorder involving a breakdown in the relation between thought, emotion, and behavior, leading to faulty perception, inappropriate actions and feelings, withdrawal from reality and personal relationships into fantasy and delusion, and a sense of mental fragmentation.

Receptor Sites

Specific locations on the surface of a cell or within a cell that are sensitive to neurotransmitters or hormones.

Amygdala

A region of the brain involved in experiencing emotions, particularly fear and pleasure.

Thalamus

A major part of the brain acting as a principal relay station for sensory information flowing to the cortex.