Which of the Following Hypotheses/theories Asserts That There Exists No

question 21

Multiple Choice

Which of the following hypotheses/theories asserts that there exists no optimal dividend policy, because a firm's dividend policy does not affect its value. 

• A)Dividend relevance theory
• B)Dividend irrelevance theory
• C)Clientele effect theory
• D)Signaling hypothesis
• E)Free cash flow hypothesis

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Definitions:

Dividends Paid

The portion of a company's earnings distributed to shareholders, usually on a regular basis.

Operating Expenses

The costs related to the day-to-day operations of a business, excluding cost of goods sold.

Cost of Goods Sold

The total cost of manufacturing or purchasing the goods a company has sold during a period.

Taxable Income

The portion of individual or corporate income subject to taxation, after all deductions and exemptions.