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:

Genetically Obese Rats

Rats that become obese due to genetic predispositions, often used in studies to understand obesity in humans.

Lateral Hypothalamus

A part of the hypothalamus in the brain that plays a significant role in controlling hunger and thirst.

Aphagia

The inability to swallow or eat, often resulting from psychological issues or physical obstructions in the eating pathway.

Lesions

are abnormal changes in tissue structure caused by disease or injury.