If Stockholders Have a Preference for Divided Income, the Optimal

question 28

True/False

If stockholders have a preference for divided income, the optimal dividend policy is to treat dividends as a residual.

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Definitions:

Dissenters

Individuals who express opinions that are at variance with those previously, commonly, or officially expressed.

Conformity

The tendency of individuals to adjust their behaviors, attitudes, and beliefs to match those of the group or social norms.

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values at the same time.

Referent Informational Influence

A form of social influence where individuals conform to the behavior of a group they admire or relate to, in order to be accepted or to identify with the group.