Low Dividends May Increase Stock Value According to the

question 37

Multiple Choice

Low dividends may increase stock value according to the

• A) bird-in-the-hand theory.
• B) information effect.
• C) impact of agency costs.
• D) tax bias in favor of capital gains.

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Definitions:

CDS Buyer

An entity that purchases a credit default swap, obtaining protection against specific credit risks.

CDS Seller

A counterparty in a credit default swap agreement who provides credit protection, compensating the buyer in case of a debt default or other credit event.

Predatory Lending

Unscrupulous lending practices that impose unfair, deceptive, or abusive loan terms on borrowers, often leading to a debt trap.

Monthly Payments

Regular payments made on a loan or mortgage, usually consisting of principal and interest components, occurring once a month.