If the _____ Is Correct, There Exists No Optimal Dividend

question 17

Multiple Choice

If the _____ is correct, there exists no optimal dividend policy, because dividend policy does not affect the value of a firm.

• A) value dividend policy
• B) dividend irrelevance theory
• C) clientele effect
• D) signaling hypothesis
• E) free cash flow theory

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Definitions:

Productive Capacity

The maximum output a system can produce over a set period under normal conditions.

PP&E

Property, Plant, and Equipment - A company's tangible fixed assets that are expected to provide economic benefits for more than one year.

Current Production

The total output of goods and services produced by an economic entity in a current period, reflecting its current level of activity.

Sale of Investments

The process of selling investments such as stocks, bonds, or real estate, typically to generate cash or realize gains.