MM's Assertion That Dividend Policy Will Not Affect the Value

question 28

Multiple Choice

MM's assertion that dividend policy will not affect the value of the firm requires that dividend policy does not:

• A) alter the retained earnings of the firm.
• B) affect investment and borrowing policies.
• C) allow the payout ratio to change.
• D) alter the number of outstanding shares.

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Definitions:

Functionality

The specific operations or features that a software or hardware is designed to perform or offer.

Peer-To-Peer

A decentralized communications model in which each party has the same capabilities and either party can initiate a communication session.

Business Model

A conceptual structure that supports the viability of a product or company and explains how the company operates, makes money, and how it intends to achieve its goals.

Rigid Categories

Strictly defined classifications that do not allow for flexibility or overlap between different groups or types.