Conservative Economists Feel That High Dividend Payouts Will Increase Share

question 73

Multiple Choice

Conservative economists feel that high dividend payouts will increase share price because:

• A)Capital gains are less certain than dividends
• B)Dividends signal higher future earnings
• C)Stocks are priced using dividend discount models
• D)Higher dividend payouts translate into higher investment returns

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Definitions:

Tender Offer

A proposal made by an investor or another company to purchase a substantial amount of a company's shares directly from its shareholders.

Corporate Raider

An investor who buys a large number of shares in a corporation with the aim to gain control of it and make changes to increase its value.