High Dividends May Increase Stock Values Due to All of the Following

question 106

Multiple Choice

High dividends may increase stock values due to all of the following reasons EXCEPT

• A) dividends are more certain than capital gains.
• B) higher dividends are used to signal higher expected future earnings.
• C) dividends are used as a tool to minimize agency costs.
• D) higher dividends allow companies to increase their proportion of external equity financing.

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Definitions:

Systematize

The process of organizing or arranging methods and processes in a systematic order to improve efficiency.

Localizing

The process of adapting content, products, or services to fit the cultural, linguistic, and other specific requirements of a particular geographic region or market.

Global Audience

Refers to the diverse and widespread group of people from various geographic, cultural, and linguistic backgrounds that can be reached or addressed, especially via the internet or mass media.

Solicited Proposal

A proposal requested by a company or individual, often in response to a specific need or project.