The Manager of XYZ Corp

question 68

Multiple Choice

The manager of XYZ Corp.feels that a dividend increase will increase stock price because many investors value stock with a dividend-discount model.Why might MM disagree with this assertion?

• A)The increased dividend makes the firm much riskier
• B)Future dividend growth may slow due to less retained earnings
• C)Investors prefer capital gains over dividends
• D)Dividend increases will increase the book value but not the market value of the firm

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Definitions:

Operating Parameter

A variable or condition that defines the operation of a system or device, such as temperature, pressure, or voltage, that needs to be maintained within specified limits.

User Defined Input

A setting or value entered into a system by the user to customize operations or outcomes.

Pre-determined Speed

The speed set for a machine or device, decided before it is operated.

Rated Speed

Rated speed is the speed at which an electric motor or machine is designed to operate under a specific load to achieve optimum performance.